Edward Deming once said, “In God we trust, all others must bring data.”
In today’s digital world, there are endless streams of data. Everything is available on the internet – tools, books, articles, newspapers, research papers and a lot more. While there are large chunks of data available to the organization, it’s important for an organization to not be overwhelmed. It’s key that they use the data which is relevant to the organization.What differentiates one organization from another is not the ability to collect and store data, but the ability to interpret it to make the right business decisions.
On a macro-level, it is clear that companies who execute decisions based on data are the ones that stand out in their industry and are ahead of their competitors. Some key insights of data-driven decision making are below.
Data-driven organizations are 23x more likely to acquire customers, 6x as likely to retain those customers, and 19x more likely to be profitable as a resultMckinsey and Company
Companies that execute decisions based on data, are 5% more productive and 6% more profitable than their competitorsHarvard Business Review
Using data effectively can have a profound impact on your business. Some of these benefits are:
- Framing and executing better marketing strategies.
- Agile Decision Making
- Measurable Goals
- Identify new business opportunities.
Marketing plans and strategies can be executed with a lot more efficiency if teams follow data-driven decision making. Understanding the consumer and current market trends is one of the trickiest things there is for an organization, however decision making based on this data can take the organization to greater heights.Netflix devises great marketing campaigns that are relevant to respective target groups. This stems from the fact of data-driven decision making.
For a company to be efficient and take advantage of the market conditions, they need to ensure data is available, and solid decisions are taken around this data. Data-driven decision making can be a huge advantage for a company as numbers don’t lie. For example, Walmart measured the effort and time going into external audits and changed the path by building an in-house team . Walmart executes at a very high level and the majority of that is to do with data-based decisions.
Another key factor in data based decision making is that the goals are measurable and quantifiable. Each team and individual knows the value of the targets they can achieve when the tasks have a numeric framework around it. To set such targets, organizations need to look at data and make decisions accordingly.
Data can reveal insights that help businesses create additional revenue streams by innovating and developing products and services that meet consumer demands. For example, Nike has improved their lines of footwear in the women’s sector by analysing key data points obtained through their apps.This has deepened their relationships with their customers.
As viewed above, there are multiple instances of companies taking advantage of the market by building a culture of data-driven decision making.Whether it’s Walmart, Netflix or Apple, these are brands that are well-known to the average consumer, and these companies have collected, analysed, interpreted and implemented data decisions accordingly.
Over the last few years, Knolskape has built various simulations on data literacy and data visualisation. In Knolskape’s simulations, we enable users to interact with different elements and events that resemble real world situations. In “ Data and Decisions” learners will go through a series of interactions and events which will put their data based decision skills to the test. The learner’s role is to help their team members solve the problems by leveraging the process of data-based decision making. The simulation will measure the learner’s performance in promoting and practising data-backed decision-making based on their recommendations to their team members’ requests.
Your organization needs to make data-driven decision-making the norm, by creating a culture that encourages critical thinking and curiosity. Members at every level need to promote data-driven decisions as the norm, from the CEO to entry level employees. Fostering such a culture will take the company to new heights and ensure success. While it is ideal that all members of an organisation take-up and immerse themselves in a simulation like this, we recommend that independent contributors and managers take up this course. Data literacy and visualisation is a core skill that is required in today’s day and age, adding data-driven decision making to it will ensure the individual is ready to make the right decisions going forward.