There is much to learn from failure, and we should always ask ourselves what we might be doing wrong. But we should also glance at the winners and wonder what they are doing right. So what are the key characteristics of companies that have successfully transformed into being data-driven? In short: What defines a data-driven company?
Not that data-drivenness is entirely binary, of course. Organizations can be at any stage of their digital transformation. Nor are our self-assessments always accurate, and organizations can be more – and certainly less – data-driven than they believe themselves to be. But if a company really is to correctly call itself data-driven, a couple of criteria need to be in place.
3 key characteristics
First of all, these companies have fundamentally understood the gravity of digitalization. They realize that big opportunities can be ceased only by surmounting even bigger challenges. This is nothing less than a necessary precondition.
Secondly, they make decisions based on facts and predictions, not guesswork or pure intuition. This is well-known internally and externally so that both customers and people within the organization know that decisions, whatever they may be, are well-reasoned and supported by data.
Furthermore, they have seen that having access to and insight based on data, provides a competitive advantage. By simply knowing what others do not, you can create more value and increase your revenue. There really is a race to decode the market data that is publicly available. And if you want any chance of doing well, you need to start by realizing that there is a race at all.
A culture of sharing
Data-driven companies are also characterized by a culture of sharing. Be it competency, data or insight: If it is perceived to be of value, it is made available to others across the organization. This not only broadcasts to everyone what is actually being produced, but this shared insight works as an important enabler of innovation. By allowing more people to view the same data through their own respective lenses, you uncover new opportunities.
Proper data governance is also a prerequisite for a functioning data-driven company. There have been many failed attempts at becoming data-driven simply because a governance framework was not in place. If you cannot trust the data, your data efforts are doomed to be dead in the water.
… but also of daring
Trust is not just about governance, however. Achieving organization-wide trust in data is part of the digital maturity process, and it has a clear cultural dimension. If the prevailing culture in a company is to keep doing things the way they have always been done, no technology is going to get their data project off the ground.
In our experience of working with both oil/gas and hydropower companies, we have seen firsthand how seasoned maintenance engineers are reluctant about accepting the new paradigm of sensor technology. They know exactly what pipes to bang on. They know what sounds to listen for. How could a gadget ever replace that?
For companies at this stage of the transformation, it really is about daringto try, while still putting safety first. Without a culture that embraces innovation, change happens slowly – if at all.
A bite-sized guide
If some of these challenges are known to your organization, you are not alone. Luckily, there are ways to get out of this rut. Skepticism is best dissolved through indisputable evidence, so try showing, not telling:
Start with a pilot project for a very concrete problem where you already have data.
Think lean and chop it up into several pieces, where each has the potential for a very visible effect or payoff.
Present success stories continuously, in a way that engages every key employee.
In short: Do not let perfect be the enemy of good. If you bite off more than you can chew, either culturally or technologically, you are bound for a setback on your way to becoming data-driven.
Chief Executive Officer
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