What We Think
June 18, 2020
Data-driven decision making
There is no doubt that we are living in a time where data has become much more accessible; new sources of data have emerged and so has the processing power and capacity for analysis. Although we are living in an oversaturated data world, firms are unfortunately still not getting the full value and insights out of data.
From our experience working with different business leaders and boards, we are realising that too many continue to base their decisions on limited data and the COVID-19 experience has highlighted this especially with the power of hindsight. Businesses are realising that some decisions were either rushed or not based on robust data and scenario planning. More than ever, it is time for a new strategic mind-set to be developed within companies and boards. The mind-set needs to constantly ask:
- Are we deriving insights from our data?
- Are we taking an internal and external approach to data sources and analysis, to inform decision-making?
- Do we have a data strategy with indicators and architecture in place?
We believe that companies need to adopt a data-mindset which will ultimately allow them to improve their strategic decision-making.
From data to insights
From our experience, we believe that a data-driven mindset can be built around 5 main pillars and processes that a company needs to implement.
- Discover – develop an understanding of internal and external data sources that the company can compile
- Design – compile a list of indicators that the company needs together with a set of decision-criteria or parameters to frame strategic decision-making
- Capture – ensure a data architecture that allows the company to aggregate data emanating from a number of sources
- Analyse – the use of dashboards and data visualisation allows business leaders to analyse trends, outliers and scenarios
- Review & monitor – important to continue monitoring progress with a set frequency
Although the process is important, it is also imperative that companies build an environment that is conducive to supporting a data-driven mindset. We recommend the following essential building blocks:
- Have the right tools – data capacity and capability does not only require the right processing power and software to enable data capture but more importantly it means having the right digital literacy skills within the organisation.
- Access the right data – it is essential for companies to ensure that they are accessing the correct data. This means that the data must be relevant, reliable, repeatable and recognised as coming from an authoritative source.
- Have a data culture – the decision-making style of the company and management needs to be based on evidence and not just on instinct. It is only by fostering such a culture and appreciation of data that a data-driven mindset can thrive.
- Start small – it is easy to fall into the trap of trying to capture all possible data. In order to avoid this trap, it is important to start small with the data at hand.
COVID-19 has shown that companies need to take decisions swiftly with foresight and hindsight. Having a data-driven strategy and decision-making process enables business leaders to take better and more informed decisions. It is therefore important for companies to start building a data-mindset and to transform data into insights.
This can not only build resilience but more importantly deliver a competitive edge.
Seed supports companies in their data-building efforts by helping them develop capabilities throughout the data cycle. In addition, we support the companies in extracting insights from data. For more information please contact JP Fabri or Glenn Fenech.