Moving your organization towards data-driven decision-making can be troublesome, but with these four truths in mind, the transition will be smoother.
Written by: James Davies, Executive Vice President of Product
As the Fourth Industrial Revolution moves full steam ahead, more businesses are utilizing their data to improve their decision making, but what are the foundational steps to realizing that change?
From one single source of information, to the role of data in decision-making, these are the four truths about moving to data-driven decision-making.
1) Enabling a shared data foundation is essential, often called a “single source of truth”
To align business strategy throughout the organization means aligning data throughout the organization, too.
The enabling technologies are now mature, and are no longer the bottleneck to data-driven decision-making.
2) Understanding the role of data-driven decision making is key to adoption
Data-driven decision-making does not replace managerial competence.
Instead, it provides the tools to support, test, qualify and examine proposals, and to measure business results.
Significantly, data can help executives discover root causes and results. Ultimately, it guides the organization towards repeatable success for future actions.
3) Adopting a data-driven culture is more important than the technology
We are all creatures of habit, and naturally resent imposed change.
By making tools available with the least possible disruption and showing the advantages of the new approach, uptake can be surprisingly quick.
4) Aligning data, decisions and strategy will plant the seeds of future success
By ensuring integrated operations, corporate strategy and business unit actions will naturally become aligned.
Data-driven decision-making enables all participants to:
- Understand the logic of corporate choices,
- Examine the results of the actions, and
- Refine the organization’s processes, systems, services and products for a brighter, more effective future.
What is the main hurdle for decision-makers?
We argue that the problem isn’t a lack of strategic thinking by decision-makers, but an inability to put strategies into action.
Often, despite the effort and insight that senior level executives put into defining the vision, no practical value is achieved.
That is because the business has no clear way to cascade strategic goals down to an operational level, manage the execution of strategic initiatives, or monitor their progress and measure their success.
The answer lies in technology - digital transformation, to be specific. However, conversations around digital transformation seemingly result in little specifity to one's organization, but as Infoworks.io explains:
"Digital transformation is really about taking a data-driven approach to every aspect of their business in an effort to create a competitive advantage."
A data-driven approach is one where technology is the foundation of decision-making.
How can technology support improved decision-making?
In a Forbes article that engages with Schwab’s views on the Fourth Industrial Revolution, futurist and strategy expert Bernard Marr points to technology as a solution.
“Companies should invest in their technical infrastructure and data analyzing capabilities,” he writes. “All businesses must be making a move to be smart, connected organizations or they will soon fall behind the competition.”
From a strategy management perspective, this advice is spot on.
We contend that many businesses still rely on the wrong systems and processes to define, communicate and execute their strategies.
Naturally, employees act according to the information they have. In turn, they move towards the goals they believe they have been set.
If the information flow is faulty or one directional, employee actions and directions will not match the strategic goals.
Building a common strategic understanding
The challenge here is that data on strategic initiatives is siloed in spreadsheets or department-level tools, which stakeholders need to update manually.
There’s no easy way to analyze the information or gain real-time insight at project management level. This makes the connection between planning, execution, monitoring and improvement too tenuous to maintain.
i-nexus recommends adopting a platform that manages strategy deployment, continuous improvement and operational performance. This system then acts as a single source of truth for analytics.
Such strategy execution platforms empower senior leaders to define clearly structured strategic goals and cascade them throughout the organization.
Employees can then use an intuitive mobile app to log updates of the work they do towards each goal. This information flows back up to a powerful analytics engine that provides real-time visualization of performance and progress.
What next steps should your business take?
The role of data in decision-making has never been more important. However, the journey to using different information sets to truly power intelligent, streamlined decision-making is challenging.
Click here to visit our Strategy Execution Management knowledge hub, filled with content to support you in embracing the 'no normal' of strategy in the 2020s and beyond, or explore these recommendations:
- Extracting value from data: Moving your business from fragmented to integrated data: Explore how integrating your data and aligning people, process and systems will make your business information invaluable.
- The Key to Strategy Execution: Uncover the benefits of excellent strategy execution, the organisations who have succeeded, and how your business can follow suit.
About the author
James Davies is i-nexus’ Executive Vice President of Product. As an experienced software executive with 20 years of experience working in Silicon Valley, USA, James has held senior leadership roles in three venture capital backed software start-ups (including CEO, CPO and Chairman) and has delivered management consulting services to some of the world’s largest technology companies.
If you’d like to talk more about the future of strategy execution, reach out to him on firstname.lastname@example.org or connect with James on LinkedIn for the latest strategy execution insights.