Datafication for Transformation: How Leaders Can Build a Data-driven Organization
“Without data you’re just another person with an opinion.” – W. Edwards Deming, American engineer, statistician, professor, author, lecturer, and management consultant
Data has emerged as one of the most valuable assets driving business transformation and innovation today. As the business landscape continues to evolve, organizations are increasingly embracing data as a pillar in organizational strategy.
Significance of datafication
Datafication simply means collection and collation of data into sets. And this is not new. Businesses have been storing and analyzing data.
Now, it has acquired a much broader paradigm with the growth of predictive analysis. The scope has expanded to using quantified data to understand patterns and predict trends across all aspects of a business. Datafication entails transforming all information on processes and people (employees and customers) into data that can be quantified, used, and from which actionable insights can be drawn. And with tools such as ML, AI, smart devices, IoT, data has become integral to the success of business organizations.
Leveraging data is an extraordinarily important step in the rapid digitalization of the business landscape. Data is infused in every aspect of operations, from processes to people, from goal setting to decision-making. You need data to gain an insightful understanding of every function of the business and of its people – employees, users or customers. Given the growing importance of building a people-centric workplace culture, data is among the most potent tools to effectively harness human capital.
In the lucid macroeconomic environment, as marketing strategies change and recruitment dynamics shift, efficient collection and intelligent use of data is key to make informed decisions and instill confidence in all the stakeholders at an organization, from employees to the board.
But for an organization to reap the benefits of datafication, all machineries should be data-centric. It means having a workplace culture that is data driven.
But is building a data-driven organization easy? No.
Only rough seas make skillful sailors: Pursuing challenges in datafication as part of organizational strategy
According to an article in Forbes, the key issues in datafication, or in adopting a data-centric approach, arise because of insufficient understanding of the subject, fear that leveraging data will cause loss of control, resistance resulting from the complexity of the problem, and the existence of a complicated “gatekeeping” mechanism in departments leading to data silos. These challenges don’t just dent productivity, but also impact collaboration and communication, resulting in poor data leveraging.
So, the first requirement is to build a data-driven mindset. This means integrating the data-based approach into the company’s culture. You can leverage data to draw actionable insights and use these strategically in operations only when your workplace culture is data-centric. This will help you not just predict market changes accurately, but also boost ROI by increasing agility, identifying business opportunities or risks, and optimizing business execution.
The time for bold moves is now: Steps leadership must take to build a data-driven enterprise
No enterprise can develop a data-driven culture overnight. It requires adjustment in business strategy and a change in culture. How do you go about creating a data-driven organization?
- Stop oscillating between the sharp horns of data dilemma. This is a key challenge confronting the leadership today.
The predicament is due to conflicting priorities, decisions, or concerns regarding the collection, storage, analysis, interpretation, and usage of data. Data-related quandary may arise because of factors such as concerns related to privacy, quality and accuracy of data, information governance and compliance, data security, sharing of data, or the ethical implications of data usage. Leaders often face the data dilemma when trying to balance the potential benefits of data utilization with the risks and complexities associated with handling and managing information.
Stop living it. Think through. Reason out with your colleagues in the management team. Understand their concerns, and ideate on how to address them through the following steps.
- Why talk about priorities if you cannot express them? Understand and schedule your business priorities. Don’t blindly chase datafication. Avoid gathering data merely for the sake of it, or just because others in your domain do that. Mull over the applications of data and its potential impact on your business. Study and analyze the operations to make them more data-centric.
Reflect on the primary challenges or issues you wish to address. This will help you establish the objective, which you can then convey to stakeholders across the organization. You can develop the metrics that will enable your team to monitor and assess progress effectively.
- Train so that no one can take it away from them. Educate and train your team on data analytics. The next step is to get your team to buy your idea of datafication. How do you do that? Through education and training applicable to every department in your organization. Every team member must understand and have the skills required to collect and use data.
Hold discussions with the different department heads, and with the HR head. Develop an L&D program and other initiatives in line with the requirements of your industry and with the specific segments each team is engaged in. Educate them on data management, data collation and sharing, sifting quality data and other crucial concepts to draw meaningful business insights from data and analytics.
By encouraging a deeper understanding of these areas, you will empower employees to leverage their data effectively and derive valuable insights for informed decision-making within the organization.
- Have the mantra for transformation? Recruit the right talent for data transformation in a data-driven organization. You cannot develop data-driven competency in the absence of the right talent. Build your data capability by hiring the required skilled workforce. This is where specialized services like Technology Executive Search become invaluable. Such firms are adept at identifying and recruiting the talent that possesses not only the technical skills but also the innovative mindset necessary for driving data-centric transformation in organizations.
Specify the role of leadership and accountability in a data-driven organization. Determine which role or function will own the data strategy. You may need a Chief Data Officer (CDO) to partner with and execute data transformation initiatives. With the help of the CDO and HR head, you can build a team of data experts to give effect to data-driven transformation.
Leadership and accountability go hand in hand. The CDO brings expertise in extracting business value from internal and external data sources, fostering data-driven capabilities throughout the organization, and proactively managing risk through the use of data and insights.
Leveraging his skills, you can drive favorable business outcomes.
(If recruiting the right talent is an issue, connect with executive talent experts such as Vantedge Search. We specialize in global executive search and talent advisory. We leverage our deep understanding of the talent market to help you find change enablers who will drive organizational strategy and success.)
You could also consider creating a leadership team of managers or senior members to build a data-driven culture. This team can prioritize data initiatives.
The right leadership will help in effectively aligning the goals and core values, besides giving a direction. It is also important to measure progress and take an agile approach in course correction.
Work towards promoting data accountability across levels in your organization. To build ownership, you can organize seminars, webinars, offer online learning programs and all other resources that will empower your team.
How will this help? In two ways. One, it will show your dedicated efforts to build a data-centric workplace culture. Second, empowerment is key to employee engagement.
Knowing that the organization is keen in the skill enhancement of its employees (and career progression) will not just help in attracting the right talent but in also retaining the existing workforce.
- When people do not trust any authority except their own – it’s good. Decentralize decision-making with analytics-backed claims. This will promote the democratization of decision-making within your organization.
A leader, experience and expertise notwithstanding, may not be the best suited always to make company-wide decisions. It is essential to seek opinions from all levels of the organization. In data-driven transformation, you cannot ignore the voice of your data scientists. They could have more incisive insights compared to executives.
Open up the decision-making process. Set aside personal biases and actively seek inputs from your employees. When soliciting their perspectives, encourage them to support their claims using analytics and reliable data sources.
What are the specific data points? Are these insights accessible to all departments?
Factoring in a range of responses can guide you towards the correct path.
- That most powerful leadership tool at your disposal. Lead by example for transforming into a data-driven enterprise. As with any initiative, transforming into a data-driven enterprise will face resistance.
If a leader walks the talk, it can help significantly in diffusing the situation. You can do this in two ways: First, actively communicate the benefits of adopting a data-driven approach. Cite data as much as possible in your interactions or communication. When deciding, don’t be solely led by intuition. You can tap into your intuitive understanding but actively refer to data.
This will lead a rationality that will not just convey your scientific approach but also motivate others to follow the same.
Discuss with your immediate team of practice leads and heads of divisions. Encourage them to pursue data realistically.
Second, provide the tools and technologies required to analyze and read data.
Lend credence to your talk by going the extra mile. Encourage your people to use these resources. If required, make it mandatory. Keep a tab on the progress and utilization. A third way to boost utilization is by recognition.
Acknowledge the efforts of those who are actively using data and data analytics. Make their work known in the organization. This is highly effective in popularizing the value and trust you place in data.
Embracing datafication is a necessity and a bold move. Necessity, because by leveraging the power of data, you drive innovation and facilitate informed decision-making. Bold, because you need to address several challenges: insufficient understanding, fear of loss of control, resistance to change, and data silos that can hinder progress.
With the right strategic approach and effective leadership, you can build a data-driven enterprise. Adopting a data-driven mindset and implementing prudent strategies, organizations can optimize operations, enhance decision-making processes, and gain a competitive edge in an increasingly data-centric world.
Information drives transformation, and data drives information. Have data? Harness its transformative force. Don’t have data? Chase it. That is the only way to make your organization’s voice heard amid the sea of opinions.
Stand out boldly with insightful data or get drowned in the cacophony of opinions – the choice is yours.