There is no doubt that big data is the new frontier of business strategy and, if harnessed correctly, can have significant impact on bottom line results. But it isn’t about allowing data driving action, it’s about using multiple data sources to inform strategic action.
The value of data
Well collected data can provide valuable insight into the cultural and profit drivers within your organisation. In the human resources area, data is proving very useful for staff engagement and staff satisfaction, productivity and performance improvement, organisational culture development as well as learning and development.
Importantly, it’s the interface between perception based data and organisational data that provides the most significant opportunities for organisations. The appropriate analysis of this combination of data allows organisations to pinpoint the cultural drivers that are also profit drivers. This enables organisations to pinpoint the cultural levers that underpin both employee engagement and profit generation.
Data can be used to create scientific forecasts, create accurate predictions and trend analysis, as well as measure the effect of change. For too long data collection and use has been confined to the finance or planning sections of businesses and very rarely incorporated the businesses human resource.
Avoid the pitfalls
Once businesses and organisations realise the potential of data, many fall into the trap of being data driven rather than data informed. That is allowing the data to drive action rather than inform action. Data should be the compass not the captain.
Organisations put a lot of effort, time and money into collecting data however many undermine these efforts by falling prey to one or more of the five following pitfalls.
- Ineffective data collection – they don’t collect the data properly or they collect data without first considering what data will be most valuable to the business and how they will use it.
- Collecting copious amounts of data and doing precisely nothing with it.
- Misreading the data due to lack of internal expertise or internal bias.
- Not understanding the relevance of the data.
- Not allocating sufficient resourcing to implement strategic actions based on the data.
Use multiple data sources to inform strategy
The real value of all organisational data is comparing and contrasting data from different vantage points to inform strategy and undertake meaningful action to achieve business outcomes.
It’s important to use both qualitative and quantitative data as well as the human factor in using data to inform strategy. Why? Only human beings can consider options, weigh up stakeholder consideration (like shareholder, customer and employee reactions to a decision), consider the risk profile of their organisation, make the final decisions and take responsibility for the results.
Why is sentiment based data important? Most organisations acknowledge the benefits of an engaged workforce (higher productivity, lower turnover, lower risk of absenteeism, presenteeism and OHS claims). However not all cultural drivers are created equal.
Overlay sentiment data with business data
You start to turn data into dollars when you overlay sentiment based data (from surveys) with organisational business data. Through correlating quantitative data with sentiment data, and information on management and leadership proficiency, you are able to clearly identify which cultural drivers are also profit drivers, what type of management style is best suited to your business model and organisation, and the current gaps.
This data enables you to make informed funding decisions, develop your staff in a way that serves both them and the organisation, and ensures that you are recruiting the talent that is going to enable your organisation to succeed.
By collecting the right data in a meaningful way, organisations can appropriately weigh investment in initiatives that are directly related to improved outcomes. This also allows the creation of capability frameworks to build the skills and proficiency in a workforce, creating sustainability in the organisation. The gains from these initiatives can then be reinvested for more ambitious initiatives over time.
There is a myriad of data available and a plethora of ways to utilise it. The critical element in turning data to dollars is to compare multiple data sources to create a well-rounded and contextualised picture, and interpret what impact this data narrative has on your strategy now and well into the future. It is worth investing in low cost tools and people and performance experts to ensure your investment in data is about generating dollars.
My top 5 tips for being data informed
- Use data to inform strategy that will support employee culture and performance.
- Take time to determine what data is most valuable and how you will use it before you start collecting.
- Use multiple data sources – qualitative and quantitative – and don’t forget the human element.
- Allocate resources to effectively analyse and interpret data, this may include bringing in an external professional.
- Generate actions and measure their effectiveness (and the financial return from your investment in data).