We recently tested 300 business leaders with at least a decade of experience in their respective fields on their understanding of data. The purpose was to assess how well decision-makers grasp data analysis and whether they were fully equipped to make data-driven decisions for their company. The results were not good.
A score of 35% was deemed a basic level of understanding, 45% to 55% intermediate and so on. Chief executives scored, on average, 30%; heads of department scored 39%; and senior managers 34%. When broken down by industry, we discovered that professionals in the property industry performed among the worst, with an average score of 29%.
One of the biggest hurdles to starting this journey can be concerns over high upfront costs and potential disruption. These fears are often misplaced and can be mitigated by taking a few practical steps.
A lack of understanding of data can hamper the adoption and use of new technology. It can also really affect the day-to-day ability of staff to effectively understand and apply the information they already have at their disposal. Upskilling on a variety of data skills at every level and in every department of a business can be one of the most efficient ways for a company of any size to start its data journey. Far too often, organisations make the mistake of starting with technology; transformation should always start with people.
What is required is an understanding of the art of the possible with data and artificial intelligence (AI). This includes the pitfalls and things to avoid, how to ask the right questions and how to use data to effectively make decisions and deliver efficiently in day-to-day roles. It should all be connected to overall business strategy and what data can do to support that. Done right, it can give a team a foundational expertise that can develop as data ambitions grow.
This is not a one-and-done situation. It is important to constantly evaluate the knowledge within each team against changing commercial priorities and new technical developments, and then update training accordingly.
It is also important to ensure a clear vision of aims. This is not about what data is or becomes; it is about what data and AI can enable, and engagement with stakeholders and a practical data strategy are key.
One of the biggest mistakes companies make when they decide they need to become data-driven is that they go too big too soon without clearly defined objectives. Seeking to make every single business function and decision informed by data insights is the ideal destination but it is not the first step on the journey. Therefore, it is better to trial a small pilot project to assess the impact. Define reasonable key performance indicators for the project and then conduct regular reviews. Lessons can be learnt at this small scale that can be applied to larger initiatives.
In parallel with this, laying core foundations will support the future. Typically, this will be something like a unit economics organisation-wide dashboard to enable visibility and rapid decision-making and bottom-up customer segmentation. If you understand your customers, almost everything flows from there. Far too often, people wait until things have gone wrong to do these core elements, but they really are the foundations to so much more. This may involve putting in some foundational technology, but remember technology is the icing not the cake – the best technology in the world will not solve problems if data and processes aren’t working first.
One of the key benefits of starting small is to gradually grow team buy-in. Business leaders can forget that among the main reasons projects such as digital transformation fail is forgetting the human element. It is critical to bring teams along by keeping them fully informed as to the reasoning and benefits of data reforms. This is especially true now given fears over jobs becoming obsolete due to AI.
Reassure teams that data tools are there to help make their jobs, and the business at large, more impactful and efficient. Seek to empower staff by taking on board their suggestions and concerns and adapting approaches accordingly. As they say, if you want to go fast, go alone; if you want to go far, go together.
Natalie Cramp is chief executive of Profusion
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