Creating a data-driven culture within an organization is a monumental task; especially if the organization is well established. In this blog post, we hope to outline the benefits of creating a democratized data-driven culture and some steps that you can take to achieve it.

What is selective data culture?

Most companies have a selective data culture. In this culture most employees don’t deal with data. Data resides in the C-suite and with the data team (if one exists). General employees receive nuggets of information, but they never see the numbers behind it. This often leads to something called the “Atlas effect”.

The “Atlas effect” occurs when an organization relies on one individual to keep all of the data and insights in their head. A system like this results in the individual becoming invaluable to the organization and causes major disruption when they leave.

In order to create a true data-driven organization, you need to democratize your data. This means sharing as much information as you can with your team. This creates a culture of transparency as well as serving as inspiration for your teams.

Our client, Organifi, has created a culture around their data. They democratize their data by having their dashboards displayed on TVs in their office that anyone can look at. And they have daily huddles around their data to make sure that they meet their goals every day.

This has created what they call the “lift effect” for their business. The “lift effect” has resulted from everyone seeing each other’s metrics, causing them create friendly competitions between departments.

You can see more about the effect that this type of culture has had on Organifi here:

Data democratization allows you to engage your entire team in the business data. By doing this, you can leverage the collective strength of your organization. This protects you from relying on individuals, and the “Atlas effect”.

What are the benefits of a democratized data-driven culture?

Employee engagement

“You can’t manage what you don’t measure” -Peter Drucker

In a data-driven culture, employees with less technical skills still work with, and benefit from data. Data allows employees to track their performance and impact on the organization over time, keeping them more engaged in their work. Employee engagement massively helps organizational growth, as engaged employees measure 17% more productive than their peers. Additionally, engaged employees report 20% higher sales than disengaged employees on average.

When employees know the criteria that they are measured against, it helps them remain focused and engaged in their work. Allowing them to track their performance over time helps to remind them of their improvement over time, or serves as a motivator in times of stagnation.

Better ideas

In addition to allowing employees to track their own performance, data-driven organizations allow employees to contribute their specific understanding and knowledge to an analysis. This diversity of viewpoints allows organizations to benefit from a wide variety of ideas. These ideas help them experiment with a number of solutions, and discover new opportunities.

Having someone from marketing look over finance data may seem counter-intuitive, but they may provide critical context to a trend that the finance department didn’t have. Having an operations expert look over sales data can help them understand needs of the team and update or implement new processes to streamline their performance.

Consistent value

In data-driven cultures, employees can discover, reuse, and adapt data to their situation. For example, investing to know the lifetime value of your clients pays off massively over time, as this information provides contextual for your finance, marketing, and operations teams.

As employees gain exposure to data, their data literacy will naturally improve. As data literacy improves, the insights that they bring to the table will get better and better. This cycle increases the potential output of every employee, lifting the entire organization to new heights. This is known as the ‘lift effect’ and we’ll talk about that more later in this post.

Financial

As touched on in the previous benefits, data-driven cultures experience several major financial benefits. One study found that data-driven companies had a 20%-30% higher EBITDA than similar companies.

In 2006, only one of the top-10 companies by market capitalization was data-driven. By 2017, data-driven companies held 6 spots on the list.

Data recently surpassed oil as the most valuable commodity in the world. Is your business sitting on an untapped oil field?

How to start democratizing data

The easiest way to democratize data is to share it. Organifi decided to display their data so that any and all of their employees could see it. Other companies may choose to do weekly meetings where they announce important business KPIs to the entire team. No matter how you go about it, the goal here is to get everyone excited and involved with company data.

Next, it’s imperative that the data be connected to a goal. Data is like gasoline, the goal gives you a destination, and your actions are the vehicle used to reach the destination. Data should fuel the decisions that you make to get to your destination.

From there, the process simply repeats itself. Create new goals, gather new data, share with the team, gather their insights, and hit your goals again.

As you complete this process over and over, it will become the norm and part of your organizational culture.

If you find yourself struggling to create a data-driven culture in your organization, we can help you achieve your goals. Schedule a call with a Praxis Metrics data expert to see what’s possible for your organization.

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