Organizations are swimming in more data than ever before, but just because you have lots of data doesn’t mean you’re successfully piloting an insights-driven organization.
Continue reading to learn what a data driven organization is and how to get there.
What is a Data Driven Organization?
Insights-driven organizations are a new kind of company that are hyper-attuned to their data and use it to inform all business decisions. Organizations that use this data driven approach are growing by more than 30% each year and are projected to earn $1.8 trillion by 2021.
Why are these data-intensive companies growing so fast?
McKinsey Global Institute has conducted extensive research into this question and has found that data driven organizations are 19 times more likely to be profitable, 6 times more likely to retain customers, and 23 times more likely to bring in new customers.
These impressive stats aren’t the result of data alone. To tap into these results, an organization needs to know how to synthesize and interpret this data efficiently and accurately. It also needs to cultivate a data driven culture, where everyone, from the top to bottom of the organization, uses data and analytics as the foundation for all business decisions.
Characteristics of Data-Driven Organization
In addition to a foundational value for data in decision making, two additional characteristics of a successful data-driven company are:
1. Open-Access to Data
Organizations that are not data-driven tend to fall prey to knowledge silos. This is when company data is tied up within different parts of the organization. This handicaps decision makers as they don’t have access to the full picture of the organization’s data.
Successful data-driven enterprises ensure that knowledge silos are broken down and that teams are able to access each other's data. Additionally, intuitive software is put in place to make this data sharing more efficient.
2. Active Data Literacy Training
Data doesn’t do you any good if you don’t know how to read it. This is why companies with a data-driven approach ensure that decision makers are trained on how to interpret and use data.
Data-Driven Companies Examples
Now that you understand some of the characteristics of data-driven business, let’s look at a few examples of what data-driven strategy looks like in practice.
- Netflix. With over 158 million subscribers, Netflix harvests watchtime data to strategically develop new content. Thanks to data-driven strategy, Netflix was so confident that House of Cards would be a hit, that it commissioned two seasons before the first episode even aired.
- American Express. This banking giant uses data-driven solutions to forecast customer loyalty and churn. This enables them to act on at-risk customers, keeping them loyal for longer.
Coca-Cola. Coca-Cola used big data to strengthen its digital loyalty program. They effectively used data to improve customer retention.
How to Create a Data Driven Culture
Circling back to the insights gathered by McKinsey Analytics, cultivating a data driven culture is one of the primary differentiators between companies that use big data successfully and those that fall behind.
McKinsey defines data driven culture as, “a set of practices that brings together data talent, tools, and decision making so that data become the default support for company operations.”
Based on McKinsey’s survey of high-performing data-driven organizations, here are 4 things your company can do to create a data driven culture, listed in order of importance:
- Ensure at least one member of your C-suite is a data leader.
- Make data broadly accessible to frontline employees.
- Support rapid testing and iteration based on data. Be tolerant of fast failure.
- When hiring for non-management roles, check for proficiency in data-related topics.
Help Your Organization Unlock the Potential of Data Driven Strategy
At Syntrix, we help healthcare organizations take advantage of data driven strategy by developing industry-leading data reporting and business analytics tools. Our comprehensive BI solutions enable you to effortlessly create dashboards, reports, and data visualizations.
To learn more about our data driven solutions, please contact our team of BI specialists today.