At OrbitMI, we support (and partner with) many data-driven companies, and so I found myself thinking on what the term entails. All companies use data in some form, but data-driven ones use it differently than others.
Ultimately, being data-driven allows a company to optimize the decision making process. By being data-driven, a company improves its ability to make more responsive, cost-effective, and optimal decisions, making them more healthy, profitable, predictable and innovative. But what characteristics define a ‘data-driven’ company?
Data can certainly give a company useful and valuable information, and many people use the term ‘smart’ to describe data that has been subject to some degree of preliminary processing. Yet for a data-driven company, that is not enough. There is another ingredient: wisdom.
Interpreting the data, applying it to the right processes at the right time, and profiting from the outcome are features that no amount of smartness in the data can deliver.
For example, data can tell you that a mortgage will cost 4% a year, but it takes wisdom to understand whether that is a good deal. It is exactly the same in the corporate world: a data-driven company is one that combines data with wisdom to give it a context that will power it ahead of its competitors.
In the maritime world, only a small proportion of companies are doing this; very few maritime companies have an executive in charge of their data strategy. Yet that level of oversight is essential if a company is to be truly data-driven and the benefits of that strategy are to be realized. It need not be an exclusive role, but it needs commitment at a high level if it is to be successfully implemented.
The responsibility shouldn’t stop there. Individuals and teams throughout an organization must be encouraged to find and use the power that comes from being data-driven.
In a data-driven organization, data is treated as an asset, just as its people are assets. With that culture in place, it can trust its people to use data to bring objectivity to their decision making and transform how the organization works.
There will be less reliance on subjective consensus – which often produces the least-worst, rather than the best, outcomes. Instead, decisions will be objective, based on data that all can see and which will serve as a rudder to steady or change the company’s course.
In a data-driven company, decisions are no longer determined by data whose origins are unclear, and if a team or product line seems to be underperforming, improvement plans can be formulaic rather than trial-and-error.
Being data-driven also encourages upward reporting. In a data-driven organization, data is recognized as revealing facts that can be discussed and addressed freely. This opens internal lines of communication, eliminating many bottlenecks can slow a company’s development. Best of all, once all those obstacles have been removed, it frees up time: time for more business development; more product design; more customer contact; time for more revenue.
Data-driven firms embrace sharing and encourage openness. Data sharing does not mean relinquishing its control. Rather, it is a shared experience that benefits both parties. When two data-driven companies work together, they do so as partners by sharing data.
OrbitMI commissioned a report that revealed the massive potential benefits across the industry from sharing data, which you can read here.
For those readers whose companies are not data-driven: you are in the majority, and there are companies out there – such as OrbitMI – that have tools to will help you reach that goal.
Don’t be put off by worries about the liabilities that holding and using data brings because all companies must put in place policies and practices to ensure compliance with data regulations. But data-driven companies do not stop there: they make that essential good governance a foundation on which to build a corporate culture that nurtures processes to support all those using the data.
This is where committed leadership can have a real impact; our CEO, Ali Riaz, has written about the importance of strong leadership. Those senior people understand that when data is properly handled, it can position and maintain their organization ahead of its competitors. Data-driven companies are faster, more profitable, leaner and, in some cases, meaner. In the maritime sector, this offers huge opportunity, not least because so few have yet to grasp this potential.
This may have an impact on how a company plans its staff structure. What is clear is that being data-driven is not about reducing headcount; it is about combining the strengths of both staff and data to achieve long-term corporate goals.
This is not a passing phase. Like the advent of the internet and the internet, there was a period of transition to reach today’s reality that no business could survive without emails and websites. So, too, with becoming data-driven: eventually, all companies will have to work this way if they want to expand their services, product lines, profitability and sustainability.
Start that journey and follow it to its destination. If not now, then when?