How Data-driven Companies Outperform the Competition

Paul Gunton
September 16, 2020

Successful businesses grasp the power of data and deliver for shareholders 

Here at OrbitMI, we support many data-driven companies but I found myself wondering recently what that actually means. All companies use data in some form but data-driven ones must use it differently than others.   

Initially, I sought my answers in service of the omnipresent shareholder.  Shareholders ask this of their company’s managers: to make the best possible decisions, in the shortest amount of time and with the least amount of expense  

Ultimately, I found my answer to be this:  By being data-driven, a company improves its ability to do all those things, making it healthy, profitable, predictable and more innovative. 

What, then, is a ‘data-driven’ company? 

 

Data can be smart but not wise 

I discussed what data itself is in an earlier blog, comparing it with oil and matching different types of data with different grades of oil. Data can certainly give a company useful and valuable information and many people use the term ‘smart’ to describe data that had some preliminary processing when it was collected to improve its usefulness. 

But for a data-driven company, that is not enough. Something more is needed, and that something is 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.  

At a domestic level, for example, data can tell you that a mortgage will cost, say, 4% a year, but it takes wisdom to understand whether that is a good deal for you. It is exactly the same in the corporate worlda data-driven company is one that combines data with wisdom to give it a context that will power it ahead of its competitors.  

 

Few companies focus on data 

Yet in the maritime world, only a small proportion of companies are doing this, according to a shipping executive I spoke to when researching for this blog 

He based his measure on his own observation that very few maritime companies have put an executive in charge of their data strategy. 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, he told me. That need not be an exclusive role – it might be added to the CEO’s or a senior manager’s responsibilities, for example – but it needs commitment at that level if it is to be successfully implemented.  

And the responsibility shouldn’t stop there. Individuals and team 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 assetsWith that culture in place, it can trust its people to use its data to bring objectivity to their decision making and transform how the organization works.  

 

Data transforms decision making 

There will be less reliance on subjective consensus – which often produces the least-worst, rather than the best, outcomes – and It will not matter who has the loudest voice. 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. 

No longer will executives make important decisions based on data whose origins are unclear and if a team or product line seems to be underperforming, improvement plans can be based on data 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 without fear or favor. This cuts through nepotism and many other things that can slow a company’s developmentBest of all, once all those obstacles have been removed, it frees up time: time for more business development; more product design; more customer contact; more revenue.  

 

Sharing data unlocks value 

Data-driven firms embrace sharing and encourage openness. Data sharing does not mean relinquishing its control. It is as if you are viewing a painting in a gallery and discussing what it means to each of you. It is a shared experience that benefits both parties. Thus, when two data-driven companies work together, they do so as partners by sharing data.  

OrbitMI commissioned a report that revealed the huge potential benefits across the industry from sharing data, which you can obtain via our website. 

Data-driven companies are also aware of the potential liabilities of handling data. Some data must be stored in certain ways for certain time periods and some must be available to auditors at a moments notice. And some  such as personal customer data – cannot be shared with anyone, even inside the organization. 

 

You are not alone 

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 regulationsBut data-driven companies do not stop there: they make that essential good governance foundation on which to build a corporate culture that nurtures processes to support all those using the data.  

 

Leadership matters 

This is where the committed leadership I mentioned can have a real impact. 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, meanerIn the maritime sector, this offers huge potential, not least because so few are grasping this potential.  

This may have an impact on how a company plans its staff structure. Ian earlier blog I discussed how data-driven companies are adopting new priorities in their searches for talent to suit a data-driven structure and how its recruits have their own expectations of the companies they join. 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 World Wide Web, there was a period of transition to reach today’s reality that no business could survive without emails and websitesSo, 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 destinationIf not now, when? 

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