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Data-Driven Decisions

Global Leadership Forecast 2018

Leading with Data-Driven Decisions:

The Culture and Skills Driving Higher Returns on Data

Evan Sinar

Nearly seven years after the first “Big Data” articles appeared in major business publications, many organizations struggle to counter Big Data’s substantial costs with newly unlocked value. A 2017 study* found that fewer than half of senior Fortune 1000 decision makers see measurable returns from Big Data. In Global Leadership Forecast 2018, we find that companies whose leaders are well prepared to use data to guide decisions are 8.7 times more likely to have closely integrated talent and business strategies, 7.4 times more likely to have a strong bench of future leaders, and 2.1 times more likely to have grown aggressively over the past three years, compared to organizations whose leaders are ill-prepared for a data-rich business context. But these are the outcomes, not the drivers. What is the leadership context—the culture and skills—that makes these returns not only possible, but probable?

Leading with Data-Driven Decisions

Traits of a Data-Driven Enterprise

We identified the five cultural factors (shown in the graphic above) in which data-savvy organizations most exceed organizations where leaders struggle with data:

  1. Strength of company culture. Data-savvy companies build the shared mental models vital for cultural strength by actively measuring and reacting to customer and employee viewpoints.
  2. Experimentation mindset. Data provides the confidence to launch and gauge the success of experiments and to objectively learn from failures.
  3. Digital technology influence. Technology is a prime source for new volumes and varieties of data; digital advancement parallels being data-savvy.
  4. Focus on future vision. Data informs trajectories and trends via prescriptive and predictive analytics.
  5. Organizational agility. Agile organizations are fueled by rapid data acquisition and action.

Yet, the need to be data-driven isn’t limited to a particular style of leadership: whether EQ or IQ is more important, whether leaders have an execution or an engagement focus, or whether leaders derive power from personal versus position-based influence.

The Skills of Data-Savvy Leaders

Traits of a data-driven enterpriseIn addition to rating their preparedness to use data in making decisions, leaders also rated their confidence in 16 skills. The figure at right orders skills based on their link with data-savvy (a longer bar equals a stronger link).

Not surprisingly, leading with digitization (using technology to manage the workforce) heads the list. Also in the top five are leading virtual teams and digital literacy (personal technology expertise). To underscore the fact that being data-savvy isn’t only about being digital, two management skills also made the top five: driving execution and integration (combining information from multiple sources). This confirmation of the importance of managerial capabilities parallels 2017 research from MIT Sloan**.

Notably, the bottom-three skills—empathy, connectivity, and collaboration—aren’t recognized enough for the role they can play in using data not just adeptly, but fairly and in partnership with others. A tighter connection of interpersonal skills to data-driven decisions may be a path for organizations to improve their low success rates extracting value from big data.

* Bean, R. (2017), How Companies Say They’re Using Big Data, Harvard Business Review.
** Bughin, J., & Hazan, E. (2017), Five management strategies for getting the most from AI, MIT Sloan Management Review.

Where to Start
  • Use data to create a common culture. Strong cultures aren’t formed by accident; they’re fostered carefully and monitored by aggressively using data to understand how employees and customers view the company and then reacting accordingly.
  • Build digital skills. Digital acumen at both a personal level (understanding new technologies oneself) and a leadership level (using technologies to lead others in different, more-effective ways) is key for successful data-driven decisions.
  • But don’t neglect the execution element. Leaders who excel at using data effectively also integrate it from multiple sources and know how to convert the data’s strategic insights into operational plans.
How to Excel + Differentiate
  • Don’t overlook empathy, connectivity, and collaboration. Few leaders see the connection between interpersonal skills and ability to use data effectively for business decisions. This is a prime opportunity to strengthen awareness of these links and to factor in the human implications of data.
  • Implement Agile project management techniques. Agile methodologies provide the cadence, mindset, and opportunity to flow high volumes, varieties, and velocities of data into actionable use.
  • Prepare for AI. Efficient and ethical artificial intelligence applications, already in the strategic plans for many organizations, will require a critical mass of leaders whose skills span digital, management, and interpersonal domains.
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