Data-Driven Strategy – Our team of strategic consultants have seen first hand just how passionate company leaders are about strategy.
Boards and senior managers will regularly come together to share great ideas for the future. Their passion, intention and commitment are unquestionable – and yet – the end result often falls short.
Why? Because there is one thing that underpins the success of any organisational strategy – and that is data.
Without the correct utilisation of data, a strategy is simply a grand dream or vision. Yes, we know that this ‘perfect future state’ demonstrates ambition, but only with a clear strategy will this become a true roadmap to success.
And for that to occur in a way that brings meaningful, measurable results, data must be incorporated from the very start. Let’s look at this in closer detail.
A Data-Driven Strategy
Companies with sound strategies use a variety of data and information sets from both internal and external sources. They gather, evaluate and utilise this data on a systematic basis and then – crucially – use it to underpin all decision making.
By doing so, they invariably make better decisions. Why? Because they use the facts rather than focusing on gut instinct or historical experiences.
What sort of data should companies use?
Useful data can be taken from a variety of sources, such as:
– Performance data (internal)
– Market Data (external)
– Comparative data (both)
How do successful companies use data?
Amazon may well be the most obvious example of a truly data-driven business, but other smaller brands are also making great strides. Ilunion is a Spanish hotel chain which has truly embraced data-driven decision making, releasing detailed operational information to the staff so that they can make better decisions. More than 12 million data points – showing revenue, pricing analytics, supply, demand and occupancy – are consolidated into user-friendly dashboards which everyone can access within the business.
Adobe uses an entirely data-driven model of operating that maps each customer’s purchase journey, from the initial point of product discovery through to repurchase. Every point in the system is informed by real-time data, providing experiential and behavioural insights as well as transactional data. This allows Adobe to predict customer behaviour and to map its own product offerings, marketing campaigns and sales initiatives accordingly.
Transport for London also maps 100 million annual passenger journeys in a central repository which can be accessed by every line of the business. Every cost centre is accountable for its own results and can view its own localised reports. TfL has also now allowed each business unit to produce, analyse and manage its own KPIs. In doing so, it is building a strong data culture and facilitating agile and localised reporting.
It is interesting to note that PwC research showed that 77% of global CEOs are planning to prioritise operational efficiencies as a means of growing revenue in 2019. To do this, data will be required to inform every decision and action and to provide a holistic 360-degree view of the business.
It isn’t easy to transition from being a company which makes decisions based on gut instinct or historical data, to a truly data-driven strategy company. To so so, requires the right culture and supporting technology.
Outdated cultures, siloed business units and legacy systems are significant blockers. Other challenges include poor quality internal data and a lack of data analysts.
However, businesses can – and do – become data-driven if they embrace information as a transformational platform for the entire organisation, top-down. By making this a business-critical priority, the right technology can be invested in, and the right culture can be built.
Then, organisations can become digital-first, and embrace information as the foundation of anything that they do. Their strategies naturally become better and more achievable.
To make this transition, organisations must:
- Create a culture that values and prioritises data; making decisions on the back of what the data says (and with leaders that are enthusiastic about doing this!) Culture can be the hardest element to tackle here, but it tends to be the most vital. It takes time, effort and visible commitment at the highest levels of the organisation in order to succeed over time.
- Prioritise data gathering, analysis and interpretation at board and leadership level, with the necessary sponsorship. Ensure that all insights from the operation are fed upwards so that the loop joins.
- Link information to the business’s core agenda, to ensure that all decisions are predicated upon this data and built into a data-driven strategy
- Hire the right talent with data development and analysis skills, to lead this internal programme of innovation. Some businesses may need to develop their own people and others will need to hire it in.
- Rework the organisational structure if necessary so that data science isn’t kept central and siloed. Instead, embed these roles into every business department.
- Bring data to life with rich insights and dashboard reporting, sharing this information widely across the organisation to all who are motivated and enthused to see it.
- Invest in the right infrastructure and technology, looking at enablers such as AI and machine learning.
With a data-driven strategy:
- Decision makers can make confident and objective decisions, evidencing their thought-process and conclusions. Crucially, it then becomes far easier to obtain buy-in, with clear data to justify business cases.
- Employees at all levels can innovate and make suggestions for improvements, using the data that the company shares. An open culture of sharing rich informatics and dashboards assists with this.
- KPIs are far easier to set – and teams can be empowered to set their own
- Employees become engaged and motivated – seeing the figures which prove their efforts and which encourage them to strive for more.
- The entire strategic measurement process becomes easier, from goal-setting and KPI measurement, through to results communication.
The Intrafocus Strategic Planning Process
The gathering, interpretation and evaluation of organisational data fall into the Assessment Phase of the Intrafocus Strategic Planning Process. Within our tried and tested framework, it takes place in Steps 1: Vision and Purpose and Step 2: Strategic Priorities, helping organisations to progress to their desired future state within a clear and actionable strategic framework.
Ready to find out more? Contact us to find out more, or book your Strategy Workshop today with an experienced facilitator and strategic consultant.