Today we are going to tackle the complex topic of building a data culture at your business. This post builds on our previous post, 13 Tips for starting business analytics at your company, creating a data culture is #3. If you haven’t checked that post out yet, you should! You may notice overlap between our recommendations for starting business analytics and building a data culture, and that is intentional. The two go hand in hand and you won’t see one without the other. Since data culture is based entirely on human change we wanted to write a dedicated post about it.
Before we proceed, let’s level-set on data culture:
Data culture is defined as the principle established in the process of social practice in both public and private sectors which requires all staffs and decision-makers to focus on the information conveyed by the existing data, and make decisions and changes according to these results instead of leading the development of the company based on experience in the particular field
Data culture is an important part of a data-driven business and provides value
Any company, regardless of size, should invest in establishing a data culture and using data as a strategic asset
Table of Contents
A LITTLE BIT ABOUT WHO WE ARE…
ReconInsight is a business analytics software and services company. Our mission is to ensure that businesses can take control of their business data to make informed decisions and strategic shifts about how their business is run.
We provide the software, services and education you will need to achieve success in your business analytics program.
The Building Blocks of Data Culture
With a bit of research, it is easy to find information on why data culture matters and guides for building a data culture. However, this content seems predominantly geared toward enterprise sized companies. While the principles they promote are still true for smaller businesses, it isn’t easy to sift through what is important and what is unrealistic for a smaller business when using a guide intended for an enterprise.
There are also interesting discussions about how small businesses have potentially higher chances of success for establishing data cultures due to their ability to take action quickly, and lower expected costs. Smaller size = smaller problem to solve.
What is our definition of ‘small business’?
We are using Gartner’s definition for small business: an organization with fewer than 100 employees and less than $50 million in annual revenue.
This is still fairly vague, in our opinion. While writing this post we did our best to cater it to businesses that don’t want to create a role or department specifically for managing and analyzing business data, but still want to reap the rewards of data culture using their existing staff. In simpler terms: implement data culture without hiring people to do it.
Using strategies and concepts from articles I linked above, plus our 30+ years of experience working with data analytics technologies and implementing business analytics programs for clients, my colleague, Chris, and I have created this guide for building an impactful data culture with smaller businesses in mind.
Data culture is a mindset, and usually includes operational change.
The white paper, ‘How to create a data culture', by Poornima Ramaswamy starts with:
Young companies often have an inherent advantage over their longer standing competitors: They were born from data. Their businesses are based on metrics and interrelated facts. Sharing data is part of their DNA.
Traditional companies view data differently. Born offline, they see data as a tool to run their businesses, not drive their strategy. They prize experience and intuition over data-based decision-making.
Data culture has become a buzzword in recent years, but it is difficult to find examples of success in ‘traditional’ businesses. We agree with Ramaswamy’s statement that businesses born offline view data as a business tool, instead of a strategic asset.
It’s important for any company contemplating a data culture to appreciate the change it will require throughout the entire business.
Leadership advocacy and active participation
Data culture instigates significant change, hopefully welcome change, but change none-the-less, and leadership should be deeply involved in its development.
For a data culture to flourish, all decision makers must align with 100% buy-in, be avid advocates, and active contributors. Larger businesses may hire a Chief Data Officer, but data culture can also be approached as a 2020 strategic goal for existing leadership.
Smart investments in the right technology
A few years ago, the expected cost of data analytics technology and services were a considerable deterrents for many businesses. But in 2019, the boom of data analytics cloud-offerings provide well-priced, easy to implement and use options to meet any business’s need.
For small businesses, their options will be greater and easier to implement because they have fewer data sources, less data, and smaller teams.
The challenge arises in identifying the best solution for your needs when the market has so many options available to you. Not all analytics technology was created equal, and often the lowest-cost subscription offerings can be limiting if your business doesn’t fit the ‘out of the box’ standard. There are a few things to keep in mind when investing in technology intended to foster data culture:
Easy-to-use user interface, with low-cost user licenses
Included support hours in the subscription price or easily added support hours from the software provider for ongoing technical assistance
Option to have set-up and installation done by software provider
Ability to implement customized business logic during set-up or after installation
Addresses data security and compliance needs
We also strongly encourage reading up on data pipelines. We have a blog post that provides a comprehensive overview of what business owners need to know about their data pipeline.
When investing in technology that will be used heavily by everyone at your business, it is vital to make informed decisions and set-up the technology so it can be adopted easily by your users.
Data Team and Data Allies
Impactful data culture that leads to data-driven business hinges on human change. It will be no surprise, then, that the humans at your business will be the most important asset in your quest for data culture bliss.
Businesses with data cultures should have two types of people: those on your data team, and those that are data allies.
First, your data team. The data team implements and sustains your data ecosystem. At ReconInsight, we believe this should include: business experts, data analysts, and leadership. We discuss these roles in this blog post.
Second, your data allies. Everyone at your organization should be considered a data ally. This means that of your employees should be equipped with the proper tools and training to help the business achieve its goals.
Establishing your employees as data allies is an significant task, requiring important strategic changes that we will detail in the following sections.
Data democratization and business transparency
Data democratization is integral to data culture. If you limit visibility into operational data, you are perpetuating information silos that often cause friction between departments and team members. This isn’t to say unlock all company information to the masses, it is important to maintain security and protect sensitive customer and employee data. However, operational information should be shared freely between teams and departments, regardless of authority.
With data democratization, your data allies have visibility, but they will also need to understand what the data means and how it relates to the business before they can provide value. Enter: business transparency.
The business transparency we’re talking about goes beyond ‘open book management’ and promotes educating all team members about where the business is headed, strategic goals, and how the data at the company works together. Employees must understand the flow of business data throughout the different departments.
Everyone should understand the context of their role within the business, how the business operates, and work collectively to accomplish business goals. This is something that small businesses are often already doing, or would be able to implement without drastic change.
Tactical and strategic data literacy
It is imperative to invest in the training and support of your data team and data allies (aka everyone at your business).
Your team must be comfortable using data for the tactical execution of their day-to-day tasks. They must know how to manipulate data in reports and dashboards, and be familiar with the data that is available to them and how it relates to themselves, their department, and the business. All employees should be power-users of your data analytics technology.
Additionally, leadership must advocate for innovation, and encourage alternative thinking when it comes to strategic analysis. Create an open doors policy, where anyone is welcome to provide new ideas and ask questions about how to use data to achieve business goals.
How do I start building a data culture?
The previous points are intended to provide a framework for success. If you address each of these areas, you should be well on the road to creating a data culture at your business. Here are a few recommendations for what you can do right now to get the ball rolling:
Define what you are willing and able to commit to. Be specific. What will your data culture look like? What is your goal state? Are you open to data culture potentially changing your business structure? Will this be a shift in how your business operations are conducted?
Create your data team.
Assign internal resources from the leadership team and identify your business expert(s).
Out-source data analyst expertise - find data analysts who can assist with technical implementation, set-up, and training, to keep things moving forward smoothly and quickly.
Plan for change management. Achieving tactical and strategic data literacy at your business comes down to one thing: robust change management. Planned, strategic, goal-oriented change management.
Data culture does not happen overnight, and it does not happen accidentally. It takes intention, planning, and consistent change management. But once you start, the rewards can be vast. It transforms a business into a well-oiled machine that is focused on business goals and strategies.
Small businesses are well-known for agility and making quick shifts at a much faster rate than their larger counterparts, which puts them in a unique position to more easily find success with a data culture at their business.
Data culture is a ‘for the greater good’ mindset that promotes thoughtful curiosity. When a data culture is thriving at a business, it creates new opportunities for a small business and how they amplify their existing team. The argument of ‘if it ain’t broke, don’t fix it’ falls short here, because what if it isn’t ‘running’ in the first place? It will require a bit of work up front, but the payout should be substantial.