What does it mean to be “Data Driven”?
I don’t know that I’ve ever met a business person who said, “I don’t care about data. Let me manage solely by intuition.” This isn’t to say that hunches and gut feel are not important (just see Malcolm Gladwell’s “Blink” if you doubt that), but that most of us understand that our hunches need to face the hard reality of data.
So it shouldn’t be controversial to say that business leaders strive to be data driven.
In the face of this, it is remarkable that so many business leaders do not have ready access to usable, actionable, real-time data. As one colleague put it to me recently: “Most people have tons of data everywhere you turn, but most of that data isn’t accessible or usable.” (Click here for supporting research by The Aberdeen Group).
This is an important incongruity: We say we want to be data driven, but most of us are not.
At the risk of over-simplifying a complex issue, I propose that we haven’t paid enough attention to balancing the cost and value of data. Most organizations have to spend way too much money to get any kind of value from data. In the Data Cost / Value Matrix they chronically live in the lower right quadrants.
(Image courtesy of Hertzler Systems Inc)
Data may be cheap but not usable and therefore of little value. Often we don’t agree on underlying assumptions used to classify or assign meaning to data so the data are not reliable or valid.
In these situations very talented people may spend hours and hours of precious time to cut, paste and scrub data so that it becomes usable. The result is expensive data that appears too late to provide timely guidance. All of this undermines a company’s efforts to become data driven.
In order to become data driven, business leaders need real-time, actionable data in a usable form. That’s how you empower a significant cultural shift: provide the right information at the right time and in the right format. Anything less doesn’t enable the data-driven organization.