As a business leader, people have stopped debating about the importance of good data. It has become the lifeblood of the complex system and instead of gut feeling, it often helps to take help from the data. The effective usage of data has been ensuring an effective conversation and decisions.
In a data-driven organization/culture, you try to capture and use all the possible data points. In this culture, you quantify as many of your goals and expectations as possible by building on and working with the data in the real time.
How to build data-driven culture?
Before you get started with the thought of developing data-driven culture, refer to my blog on understanding and defining your company culture. This will give you a good idea about how to build a culture. If you absorb this very well then it will make sense to build data-driven culture.
In order to create a data-driven culture, it is important to enable everyone to consistently drive their actions with metrics. And for that, everyone must have access to the data they need and the tools to interpret it. Everyone should be taken on board that the data collected has the required level of correctness, transparency and it is meant for improving the organization.
Following diagram depicts the process involved in measuring the effectiveness of the process of creating a data-driven culture:
Benefits of Data-Driven Culture
No Place for Guesswork
If things are not transparently defined, we all know how different people interpret the same things differently. Without valid data, you will be resorting to guesswork and gut feeling. Sometimes you will be right and a lot of times you may be wrong. As a leader, people do expect you to be right, always! If you get it wrong then you will be seen as unfair or at the best incapable. And hence, the guesswork and the gut feelings must be avoided as much as possible in the data-driven culture.
Better Success for New Initiatives
One of the key reasons for the failure of the new initiatives is the lack of well-defined measurement. In a data-driven organization/culture, for any initiative, you first think about how will that get measured. This attitude itself provides a base for continuous improvement and hence the likelihood of success of the new initiatives become higher.
The transparency in collecting and using the data ensure that people see the leaders as transparent. Further, people know that things are transparent and in such case, they try their best to stay fair, which in turn improves fairness in the overall system.
However, we do need to be careful in a certain aspect of transparency. Specifically, there is an age-old recommendation that “Praise in public and criticize in private”. The transparency and data collection do need to ensure that these softer aspects are taken care. When this is done appropriately, it creates an amazing environment of trust.
Role Model for Others
The transparency and crowdsourcing ensure that people who are aligned and focussed on the company purpose gain more visibility. Of course, other people can drill down to see what is making them more successful and visible.
This is where it is important that the feedback must be objective and it must exactly explain, why someone is being appreciated. For example, if a company has one of the core value as “Continuous Improvement” and one of the employee shows visible improvement then it should be explicitly mentioned while appreciating the individual. This acts as a great reference and motivation for others as well.
Year-end arguments vs daily improvement
The traditional subjective system and hence culture was always giving way to a discussion like “why my friend is rated better than me, while we did similar work”? In the year end, this one discussion is so subjective that none is right or wrong and eventually a huge withdrawal happens. Both the parties compromise and in best case decide to move on with damaged energy level.
With data-driven culture, the transparency ensures that people have ample opportunity to see what is going on around them and pick themselves up and be counted. They do see that they have more control on their success as they can stay focussed on their daily improvement.
You’ve put the time into building a data-driven culture, your team is on the same page about metrics and goals, the data is transparent, and you have the EngazeWell software in place for proper data analysis. Just beating the drum around being a data-driven culture will not help. You seriously need to get down to using this to make things more effective for yourself and your organization.
For example, one of our customers is using employee engagement score for the following purposes
- Quarterly / half-yearly rewards and recognition
- Yearly Appraisal
- Salary hike
- Employee Loan Review and Approval
- Advance Salary Review and Approval
- Variable Pay
Challenges in becoming data-driven culture
When there is a lot of focus on data, many times we hide in it and feel that job is done. The fact is that we do need to remind ourselves that we pledged for making data-driven organization so that everyone can have an improved life. Thus, we should not be dumping some of the good things that we were already doing. In this section, I will talk about some of the things that we shall be careful about.
Don’t lose human touch
What you want out of data and metrics are insights. With the wealth of data available to you, it’s tempting to try to do too much with data. Avoid the “analysis paralysis” or just being inside the data. Remember, the employee engagement is like a Karma, where there may be guidelines but for the same activity, there may be different credit or debit, based on the situation, timing, person, impact, etc.
Make sure that people are not losing the human touch. The data collection must happen implicitly, without any fuss and people shall work as usual, as if there is no data collection happening. Always remember that data and metrics are means to an end.
Like any initiative, the decision of building a data-driven organization is a huge initiative. While we often hear from leaders that the change is the only constant, the fact remains that inertia does resist and people find changes to be difficult. Even when people get onboard, they might not understand the system and its purpose exactly the way a leadership team may understand. Hence, there may be some inconsistency in the beginning.
This is where the continuous education has to happen for the people about the importance of quality data and the purpose that it solves. Also, the system needs to provide a way to prevent people from making significantly visible mistakes. For example, a subordinate giving the manager a project performance feedback, would not make sense and hence he/she will have access to options which makes sense for his/her roles and responsibility.
Hanging on to the past
Since the data is transparently shared, people know how they are doing. While this motivates the people who want to improve but they are still lagging, sometimes the people in the front becomes complacent. This is not great for the individual as well as for the company.
The leadership team needs to personally spend time with such people and keep challenging them. Also, the other people who are making good progress during a given month or period shall be celebrated to keep the momentum going at the organization level.
In this article, I have given a quick idea about how to build a data-driven culture, the benefits of a data-driven culture and some of the challenges that you would face while building this culture. There is no doubt that the data helps us in taking more informed and accurate decisions. Specifically, in employee engagement, where everything cannot be made very objective, it becomes important to be as accurate as possible. Hence, it makes perfect sense for any serious leader to build a data-driven culture consciously and proactively.