Are You Data Driven? Take a Hard Look in the Mirror

Focus on understanding causes, not just correlations. Put data in the hands of decision-makers. Act on data, even when it’s incomplete. Celebrate data-driven successes (and do something about failures). Reject ‘gut-feelings’ in favor of data-driven insights. Employ data to develop new approaches to old problems. Track, measure and experiment to improve. Reject the status quo in favor of the data-driven. Thrive on data, not just on the data-driven.

Data-Driven is becoming an increasingly popular term these days. Studies have shown that companies with a data-driven mindset are more profitable than those which don't. For this reason, it's important to become data-driven. However, it often seems that there is no clear criteria to measure success in this area. In my opinion, data-driven success is all about making better decisions across the board. From my experience, I have identified twelve traits of data-driven individuals and organizations. These traits are: making decisions at the lowest possible level, using a variety of data sources, focusing on understanding causation, giving data to decision-makers, acting on data even when it's incomplete, recognizing successes and failures, relying on data instead of gut-feeling, utilizing data to solve problems, tracking, measuring and experimenting to improve, challenging the status quo, and embracing data-driven solutions.

People who develop an appreciation for variation, can deal with uncertainty in a reasonable manner, integrate their ability to understand data and its implications and intuitions, recognize the importance of high-quality data and invest to improve, are good experimenters and researchers, understand that decision criteria can vary with circumstances, recognize that making a decision is only step one, work hard to learn new skills and bring new data and new data technologies, learn from their mistakes - all of these traits are important and should be taken into account.

They actively look for that variation, and then use the data to understand it, make it better, and then work to keep it within some acceptable bounds.

Data-driven companies work to push decision-making to the lowest possible level, freeing up senior time for the most important decisions. This process allows lower-level personnel to take greater care when making decisions, building the right kinds of organizational capability and creating a more enjoyable work environment. Additionally, data-driven companies have an innate sense that variation dominates, and actively use data to understand and improve processes, keeping them within acceptable bounds.

The data-driven understand the importance of understanding variation, even if they do not use control charts. One middle manager recounted how difficult it was for them to accept that results can fluctuate, but eventually they realized this was the case. They put a high emphasis on having dependable data, as they understand that their decisions are only as reliable as the data they are based on, and thus they are willing to invest in quality data sources.

When a time-sensitive issue arises, those with a data-driven mindset are prepared to act. By having access to high-quality data, it is easier to understand variation and reduce uncertainty. Measuring success through execution is made easier with data-driven decisions, and it helps others to follow the logic and align with the decision-maker. As one continues to execute, more data is acquired, allowing for the re-evaluation and refinement of decisions. Data-driven individuals are quicker to recognize when a decision is wrong and adjust accordingly, but not to an unsustainable degree. To assess how data-driven one is, look at the traits listed above and give yourself a point for each trait you follow regularly, and half a point for those you follow most but not all of the time.

Be honest and take a hard look at what you can do to improve. If you can only cite an instance or two of success, don't give yourself or your organization any credit. Unless you can demonstrate seven or more examples of success, strive to improve. To help you do that, consider pushing decision-making down the organization, as this has been proven to have many benefits. Additionally, invest in quality data, as you cannot be data-driven or do anything consistently well without trusting your data and data sources. Finally, challenge yourself and your team to be honest and take a hard look at what can be done to improve.