In his latest blog post, How data-driven companies outperform the competition, my colleague Paul Gunton goes deeper into what a data-driven company looks like. As in all of his work, Paul takes you on a lyrical stroll, uncovering aspects of the topic you may have otherwise missed had you found some consultant’s essay. You should read it. This piece is its companion, less lyrical, more list-y. Together we at OrbitMI aim to demystify the notion of what it means to be data-driven.
Here is a list of ten things data-driven companies know that you need to know:
Data can be smart. It can tell you that two times two is four. But data can’t tell you what “four” means (the number of people in a dinner reservation? A great mortgage rate in the US?). For that you need context. You need wisdom. And for wisdom and context you need people. Data without wisdom is meaningless; data plus wisdom supports analysis and decision making.
In other industries, firms often employ a Chief Data Officer. In maritime, that role need not be a full-time job; it might be added to the CEO’s or a senior manager’s responsibilities, for example. No matter the rank or title, if a company is to realize the benefits of data a senior executive must rally the firm around data-driven decision making.
Data driven firms implement a data governance regime including policies and practices to ensure compliance with data regulations. They follow best practices for using, updating and storing data. They know what data can be shared and with whom, and which data can never be shared.
Data governance breeds trust, which is the foundation for a data-driven culture. An organization that trusts and encourages people and teams to use data in decision making will unlock its value.
Data-driven companies democratize data across departments so they can collaborate in decision-making. Data sharing does not mean relinquishing its control. For example, the CFO still owns the general ledger at the corporate level but allows departments to access their own financial so they can drive their own analysis, faster and without fear.
Firms want consensus in decision-making but with no common source of trusted data, consensus often produces the least-worst, rather than the best, outcomes as the team follows the HIPPO effect, deferring to the "Highest Paid Person's Opinion." Typically those "HIPPOs" have been older men. In contrast, decision-making based on objective data that everyone sees has the potential to cut through nepotism, biases based on race, gender and many other things that can slow a company’s development.
Without data, executives make decisions on gut feel and assumptions, which stymies innovative thinking and stifles collaboration: Who wants to tell the boss he’s wrong? Instead, data-driven organizations encourage speaking truth to power. Data reveal facts that can be discussed and addressed without fear or favor.
Remove the obstacles of access, bias and fear, and you can move faster. What to do with that freed up time? How about more customer contact? Or business development? What if you could dig into your customers' business challenges? Data-driven companies often have more satisfied customers.
Younger people, particularly those with quantitative skills, expect their firms to have powerful maritime intelligence and analytical tools at their disposal, delivered to them anytime, anywhere. To succeed in the quest for talent, data-driven companies understand what motivates recruits, and have the solutions to keep them engage.
What do shareholders ask of their company’s managers: to make the best possible decisions, in the shortest time and with the least amount of effort. Data-driven companies do all those things better, making them healthy, profitable, predictable and more innovative.