“Big data is the oil of the 21st century” wrote Peter Sondergaard from Gartner in 2015. It’s a good comparison because the oil that comes out of the ground won’t make your car move forwards. It would just block up your engine. Oil must be refined before it’s useful. Similarly big piles of raw data are likely to clog up your decision-making. To drive your organisation forwards, data needs refining to create a simple and actionable ‘so what’.
Our need for more informed decision-making
Over the last few weeks I’ve been talking to my network about informed decision-making. I asked some of them a simple question. What do you see preventing organisations from turning data into decisions?
The response has been very interesting. While they come from different countries and industries, they are seeing similar challenges. A disconnect between data and decision-making that is holding organisations back.
Some see it as a cultural problem. Some see it as a skills gap. But they all talked about their passion for this subject. A few even apologised for hopping onto their soap box! So what’s causing these challenges? Why isn’t every organisation turning data into decisions?
Why is turning data into decisions hard?
The cultural challenge with data
While more data might be available, not everyone is becoming more available to the data. Managers need an open mind to hear what the evidence is saying. This can be hard when new insight conflicts with personal experiences or familiar research. The easy thing is to focus on discrediting the data. It’s like a chef telling a waiter not to report customer complaints about the food, until there is a statistically valid sample size!
Often this problem comes from a lack of conviction. Managers lack the belief that being customer-centric is the best way to succeed. They believe they know better. But left unchecked, this culture will lead to managers making decisions first, then seeking out the data to support them.
The skills challenge with data
Decision-makers can only make evidence-based decisions if they understand what they’re seeing. They must be able to see the business implications. But this skills gap goes deeper than decision-makers.
The people analysing the data must understand the business context. Generic analysis won’t help the decision-makers. The raw data must be refined using business expertise. Only then can it become simple actionable insights.
5 tips for turning data into more informed decisions
Start with a plan
Begin with the end in mind. What decisions do you need to make? What assumptions do you need to test? What customer understanding are you missing? Once your insights have purpose, you can start planning how to get the data you need. Without this purpose, future decisions will be limited by the current data available.
Collect the right data
Don’t settle for making decisions based on current data. Using your insight plan ensure that the right data is required. The right data is consistent, timely and relevant to the insight plan.
Combine data with expertise
Data becomes insight when it’s made insight-full. When it has a clear ‘so what’ for decision-makers. Different organisations will not respond to the same data in the same way. So organisations need a consistent process for blending data with business expertise.
Share insight widely
For insight to inform decisions, it must get to the right people at the right time. If it can’t, then the size of your data or the sophistication of your analysis doesn’t matter. This step is easier, if you started with a plan. You will know which decisions need insight, and hence who needs to know what by when.
Keep insights alive
Ensure insights follow the decisions they informed. Staff need to understand why decisions are made, as well as the decision itself. If they must assume the logic, they’re unlikely to take consistent action. Plus insights are rarely complete. They need updating as more data is captured and new lessons are learned.