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Why Relationships Are Key to Becoming a Data-Driven Organization

Technology   |   Lachlan Nichols   |   Jun 23, 2023

The drumbeat has gotten loud. Business leaders all over the world want their organizations to be more data-driven. And that’s good! Seventy-one percent (71%) of business leaders see data as critical in decision-making for their organization. That’s good too! They know the path to being truly data-driven runs through an improved tech stack. They’re not wrong.

But as sensible as all that sounds, when a group of Fortune 1000 executives were surveyed, 92% said their principal challenge is people, business processes, and culture. Becoming data-driven isn’t just about updating your technology. It’s about enabling a shift in culture, engagement, and perception within your organization.

What is a data-driven organization?

A data-driven organization is one where decisions are being made with access to and understanding of relevant information in real-time. For example, a sales rep has two conflicting customer meetings and must prioritize one. A warehouse coordinator must choose a logistics partner for a newly won customer route. The board making their next M&A go/no-go. To achieve data democratization across an organization, the alignment of people, process, and technology comes to the fore — with a focus on people!

Data democratization plays a large part in unlocking your people potential. You’ll naturally need a core team of highly data-literate people for whom this is the center of their universe. But part of their role is spreading that capability, upskilling colleagues so that people in each core function of the business can fully appreciate the data they’re looking at and the reasons behind its importance. When a larger portion of your employee base understands where the data comes from, they can see why and how they might use it to inform a big decision, or even a little one.

In a previous role I had, we were measuring the performance of different revenue lines, but we were entirely dependent on a single data analyst. Nobody else could see how the data was generated or where it originated. Each time we sought to clarify why a certain line was up or down, we had to wait another day or two so the analyst could spit out the insights and share them back. To me, that is not a data-driven organization. Only when we empower the right people (in this case, the revenue line owners) to dive into the data can we start to see the magic happen.

Part of empowering the right people is helping them to ask the right questions, creating a culture of curiosity. This isn’t as easy as it sounds, research shows 70% of people face barriers to asking more questions at work, even though the benefits of curiosity include higher performance and more adaptable firms.

To understand why we want our people to be curious, let’s walk through a scenario:
You are a production manager and the sales team asks you to change your production plan, now producing only 1 product for the rest of the week and no longer producing another 5-product type.

Do you want the person who says yes without a second thought or the person who follows up with the sales team to understand why, work with the sales team, and ensure the ramifications are known before continuing?

Regardless of the technology and processes in place at the company, the outcome for the business varies greatly depending on the curiosity of the person you have in place.

To be truly data-driven, you need to start with people. You need people who are curious. People who aren’t afraid to ask why. People who are eager to dig into data and willing to make decisions based on it.

Data and business leaders working together

So we know what a data-driven organization is and the importance of curious team members, but how do you become a data-driven organization? It’s easy! Just alter your entire workplace culture, change how every department engages with data, and shift your colleagues’ perception of how it should all work.

OK, jokes aside, it’s about starting with the right foundation, enabling the right access to data with the right governance in place, but not red tape.

Research shows red tape has significant negative impacts to organizational performance and employee outcomes, so how do we ensure information is being used appropriately without stifling our business? Making governance be seen not as a blocker but as a dependency to trusted insights.

One method is to create a Center of Excellence/Enablement (COE). When I talk about a COE, I’m not talking about a siloed team where a few SMEs do everything and know everything. Instead, the idea is to connect your governance and business arms so you can empower more people.

Within your business arm, you probably already have some super-users – highly engaged people who use your current tech stack. Maybe they depend on the governance team that controls the stack and creates processes and guardrails. (You know, the rules everyone must follow so all can trust the data), or maybe they aren’t aware or have developed their own. Through your COE, you will want to take those two groups – the super-users from each department and the governance team – and join them at the hip.

By connecting the governance and business arms, you open the door for organization-wide enablement. The tech stack and processes are critical, but you don’t have much to work with if you don’t have people who can find the correct data, interpret it, and derive insights. The joining of these two arms allows for the proliferation of relevant use cases built with the necessary rules in place. Only when the business is enabled to make data-based decisions can we refine our practices and really move the dial.

Trust: it goes both ways

Business users need to trust the data in your organization. They need to know it’s relevant and clean. For that reason, while governance teams build guardrails that ensure there is trust in the data, the data processes need to be transparent and visible to all. When people see how data has been wrangled or changed, they more readily understand it, work with it and accept its integrity. While someone in the business may be using data to make decisions, do they understand where this data comes from? The journey the data has been on may matter when interpreting the insights being generated.
This trust can reduce the bottlenecks within an organization. If you trust and empower your business users with the data (and the journey that data has been on) they need to make decisions, you avoid reliance on other business units and the inefficiency this can create (imagine needing to ask and wait to receive information, every time you needed it just to do your job!).

When empowering your business users, start with understanding who needs access to what data. Once you’ve found the right people and given them proper access, you’ll need to empower them the best you can so they can turn data into insights and make well-informed decisions for their part of the business.

Once you train people, let go and trust them to use the systems you’ve created. Provide guardrails but let them do what you’ve empowered them to do. Trust cuts both ways, and everyone must do their part.

* * * * *

Creating and nurturing a data-driven organization is a highly collaborative effort. It is the work of many, not just a few. It is the work of both your COE and your business users. It is the work of both staff, who’ve been empowered to analyze and critique data, and the leaders with whom they share their hidden gems and insights. It is a confluence of smart people, intelligent processes, and powerful technology. Most importantly, everybody in the organization wins when it all comes together.

Lachlan Nichols is Strategic Customer Success Manager – APJ for Alteryx.