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The Importance of Data-Driven Leadership

Modern society thrives on information: With just a few simple keystrokes, a plethora of data is at your fingertips. In the business world, the value of actionable data is critical to success — and smart business leaders across industries understand the importance of data-driven decision-making. By leveraging this practice, these leaders gain a competitive edge.

Fostering a data-driven culture

While some have quickly embraced the shift to a data-driven approach, others have yet to make the move. Why? According to a recent article in the Harvard Business Review, the barrier isn’t technical; rather, it’s driven by the business’s culture itself. Some organizations simply have not made the top-down adjustments necessary to cultivate a business-wide data-driven culture, even though they understand the power of data itself.

Here are a few tips for ensuring your business is on the right path to data-driven success:

  • Start at the top. A data-driven culture starts at the very top. Business leaders must embrace data-driven decision-making and set that same expectation for employees. Lead by example, explain why the best decisions are data-driven ones, and institute the approach as a natural shift in modern decision-making, not an unusual or novel change to be afraid of.
  • Choose the right metrics. Every business has unique data needs. Choose your metrics thoughtfully in order to achieve maximum success. Be open to rethinking which metrics are most valuable as you continue to build your data set.
  • Involve your data scientists. In business, data scientists are often insulated from day-to-day operations, but in the modern world, where data drives businesses forward, their insight should be front and center. To fully embrace a data-driven culture, data scientists should be encouraged to engage in meaningful conversations about a business’s overall goals and empowered to provide critical insight into how best to drive success.

Embracing data-driven leadership

Once your leadership group and employees have fully internalized the approach outlined above, it’s time to establish data-driven project management processes within your organization. The onus is on your management team to drive momentum, so buy-in from this group is critical to success.

  1. Set clear goals and objectives. Leaders must provide their teams with both direction and a clear vision of the goal the business is working towards. All goals and objectives should be meaningful and measurable.
  2. Align data-driven goals with business strategy. Connecting data-driven goals with overall business strategy helps ensure all key players, including data scientists, understand the “why” behind your company’s shift to data-driven decision-making.
  3. Focus on communication. Develop clear communication expectations and encourage your team to collaborate and share ideas and provide the tools and platforms necessary to keep the data flowing.

Data-driven leadership is the future

When a business embraces the data-driven leadership model, its leaders are empowered with information backed by evidence — allowing them greater insight into their company’s overall performance, market trends, customer behavior, and operational efficiency and enabling opportunity for operational excellence.

With solid metrics identifying trends and increasing customer understanding, business leaders can then formulate personalized offers to critical customer subsets, helping to deliver exceptional customer experiences. Comprehensive customer data also fosters the ability to tailor marketing campaigns, refine project strategies, and build longer-lasting customer relationships.

Finally, in today’s fast-paced and dynamic business environment, it’s critical to adapt quickly in the face of change. Data-driven leaders are able to analyze data in real time — staying ahead of market shifts, evaluating (and tweaking) performance, anticipating industry trends, and making strategy adjustments on the fly. Data also lends transparency and objectivity to performance evaluations, enabling leaders to provide constructive criticism and additional support when it matters.

From data-driven to data-led

Once a business has successfully integrated a data-driven management approach, a critical next step is to focus on becoming a data-led organization. What’s the difference?

A business adopting a data-led model incorporates data in every level and every role within the business: From data infrastructure, machine learning, and analytics to the data team itself, data-led organizations enable data to permeate their entire business strategy and operation. Data-led businesses are more viable in the long term and more prepared to adapt and survive in challenging economic times.

recent Forbes article provides several key insights into transitioning from a data-driven to a data-led organization. Data-led organizations:

  1. Analyze and gain a better understanding of the competitive landscape through data.
  2. Understand where data should sit within their organizational structure, often decentralizing their data team so it sits within smaller pods across individual business units.
  3. Involve their entire organization in a shared data consciousness, ensuring individual contributors, middle management, and executive leadership all understand how to utilize data in day-to-day tasks.
  4. Embrace new data tools. Automated, cloud-based tools provide real-time insight, enable better collaboration, and tell the data-driven stories driving success.

Data-driven and data-led organizations understand all the tangible benefits information provides. As businesses of all sizes increasingly optimize the value of the information at their fingertips, data-led organizations will continue to thrive as the cornerstone of sustainable growth and competitive advantage. Do not be left behind.


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