Promoting Data Literacy and Fostering a Data-Driven Culture in the Company
To be a Data-Driven organization, its people need to be data literate first. Promoting data literacy, however, is more than just a numbers game. Business leaders need to change people’s behavior, mindset, and how they assess information and use technology to process it.
Houston Astros, an American professional baseball team, used to have a poor track record. They lost 111 out of 162 games in a span of four years, and even finished a season with the worst record in the franchise. That all changed when they finished first in the American League West Division and clinched the World Series championship in 2017 for the first time in its 59-year history.
Their secret sauce? Data and analytics.
Using data is not unheard of in the sports industry, but how Houston Astros applied analytics to their strategies was a game changer.
The path to where they are now wasn’t always straightforward. It took them at least three years to get everyone on board. They had to wrestle with pushback, complaints, and skepticism from coaches and players. They eventually won them over by translating data into something more palatable and enabling them to use the tools that crunch those data. They fostered data literacy based on opportunities to improve — from scouting and drafting players, throwing a pitch, and hitting the ball to scheduling physical and mental training.
Unfortunately, not every organization is as successful as the Houston Astros is in harnessing the transformative power of data. Surveyed chief data officers said poor data literacy remains one of their company’s biggest obstacles when building data and analytics teams. On the other side of the fence, only 21% of over 9,000 surveyed employees across the world were data literate. The unease also extends to leadership: Over two-thirds of managers and executives said they aren’t comfortable accessing or using data.
It’s no surprise that on average, only 48% of business decisions are data-driven. A lot of organizations still struggle to derive meaning and value from their data — not because they don’t have the tools or technologies, but because of a deep-seated corporate culture that resists change.
What is data literacy?
Data literacy is the ability to read, comprehend, and use data in different ways. It involves asking the right questions to make decisions, building working knowledge, and communicating meaning and context to others. Data literacy is not about becoming a data scientist or learning programming languages. It’s about understanding the different types and sources of data, knowing how, where, and what to analyze, and ensuring that data is accurate, reliable, and useful.
In today’s digital age, data is omnipresent. It’s crucial for everyone within the company to have the skills to properly use it. French food services company Sodexo, for instance, learned a costly lesson when it found that its employees — who were used to working a certain way — didn’t properly key in the right buttons in the newly installed cash registers that were designed to capture data for inventory management. If Sodexo’s managers used the bad data, customers would’ve found their choices limited to breakfast sausages with no croissants on the menu — in France no less.
Fortunately, business leaders are realizing that data is no longer just in the hands of IT, development, or data science teams. It’s predicted that by 2023, over 80% of analytics and change management programs will formally include data literacy as a requirement.
This means that data literacy is no longer an optional, nice-to-have skill for employees, but a must-have. A survey of HR managers and recruiters in the US noted that data literacy skills are tipping the scale in hiring decisions, especially among new graduates and in multinational companies and academic organizations.
On the other hand, organizations need to democratize data and establish programs that will equip their workforce with the right tools to bridge the skills gap. This means nurturing an environment where working with data is an inherent part of the organization’s culture. Houston Astros’ management and operations teams, for example, scoured the world to hire people who can hit a baseball during practice and program in SQL during meetings. By bringing relatability into the table, the players and coaches came to appreciate data and eventually championed it themselves.
Data literacy makes good business sense.
Data literacy forms the foundation of informed business decisions. By promoting data literacy throughout the company, businesses can bring wide-ranging and creative perspectives that can mitigate the risks of groupthink and bias and take advantage of opportunities that data can help reveal.
Here are some of the ways in which data literacy matters to the business:
Data is the new gold. It’s become so embedded in the business fabric that 83% of companies in the US use it increase the profitability of their products and services. Meanwhile, the value of data economy in the EU and UK exceeded 400 billion euros in 2019. An interconnected business landscape and the remarkable leaps in technology mean data is everywhere. Anyone can collect data, but like gold, it isn’t as valuable when it’s unrefined. To extract value from data, it needs to be cleansed and processed, and this requires the right tools and skills.
The rise of data heroes. Democratizing data transforms employees into data heroes and data citizens who contribute unique perspectives in business decisions. Empowering people across the company to use and experiment with data, analytics, and digital technologies enables them to innovate and do their work more efficiently. For example, a survey of chief supply chain officers (CSCOs) found a strong connection between data literacy and supply chain performance. Those that underwent a data literacy program had much higher percentages of meeting various metrics and key performance indicators (KPIs) compared with those who haven’t.
Renewed focus on privacy and security. Data literacy teaches employees ownership and responsibility when it comes to handling, processing, and managing data. The more they understand the data, the more they’d recognize its impact to the business. IT leaders cite the lack of general awareness among employees as one of the root causes of insider data breaches. With the speed with which data proliferates, employees should be equipped with skills needed to cut through the data noise while being more aware of the implications of using data.
Fostering a data-driven organization culture needs a proactive approach.
Technology cannot solve a cultural problem. It’s not enough to develop dashboards if their users don’t (or don’t want to) know how to interpret them or apply them to business processes. To become data-driven, organizations need to reinvent its approach to using data beyond technology.
Nurturing data literacy throughout the company has certain prerequisites:
Start at the very top. Any significant change within the company creates a paradigm shift for many, and it takes maturity to embrace it. Fostering a data-driven culture also means securing buy-ins from the people. To win their hearts and minds, leaders need to walk the talk — actively supporting the program and conveying clear vision and goals. Adopt a top-down leadership approach and bottom-up engagement. A report that compiled the experience of over 300 C-level officers noted that people are more likely buy into a change when they understand it and feel that they’re part of it.
Start small and continuously track progress. Cultivating data literacy is an iterative process that entails getting and learning from constructive feedback. If new tools or technologies are introduced, it’s good practice to start with a minimum viable product (MVP) or a proof of concept (PoC) to test their openness to using them. MVPs and PoCs also help gauge the resources you’ll need down the line. People will more likely embrace them if they can see and feel immediate, tangible benefits, however small.
Establish a single source of truth. Despite the abundance of data, nearly half of all surveyed marketers said that fragmented, siloed, and difficult-to-access data is hindering them from understanding their client’s customer journeys. A single source of truth ensures that everyone within the company is speaking the same data and looking at the same direction. Leaving people to gather and define their own truth leads to confusion, uncertainty, and inconsistency.
Invest in capabilities and upskill employees. It’s not just about training people. It also means having the necessary technologies to support data-driven outcomes and creating an environment that enables it. Adobe, Bloomberg, and Guardian Life Insurance, for example, created playbooks and built their own internal digital academies that focused on helping employees across all departments and business roles learn how to analyze data. Adobe’s approach, in particular, helped them achieve a 96% retention rate in their people. Chevron and AppNexus approached it differently by organizing competitions that also allow them to identify and hone talent.
Enforce transparency, governance, and integrity. Democratization opens data to different teams that can help each other to avoid misunderstandings, errors, and biases and hold each other accountable. Businesses recognize the importance of data governance given the implementation of the EU General Data Protection Regulation (GDPR), but not enough companies have it in place. Executives even reportedly avoided it in their discussions. A strong data governance policy includes dedicated, functional teams that check the accuracy and trustworthiness of data, safeguard its privacy and security, and ensure that data management processes are followed.
Data is worthless without the skills to understand it.
Today’s increasingly connected and data-driven world is sparking change for many enterprises, spurring them into rethinking and revamping the building blocks that power their businesses. Data-driven companies are said to be twice as likely to exceed business goals in 12 months compared with those who aren’t.
However, strategic ambitions can run headlong against a reality for most enterprises: that data is unfolding too fast for their people, processes, and technologies to keep up. The ability and willingness — or lack thereof — to find a balance between them will determine the success, failure, or abandonment of those ambitions.
Fostering a data-driven culture is a long-term initiative that requires redefining mindsets and encouraging new ways of thinking, learning, and working. Having a solid analytics platform is important, but if the people within the organization aren’t ready to use it, any attempt at promoting data literacy will simply magnify these flaws.
Culture cannot be simply changed like software. It is the cumulative set of beliefs, values, and behaviors that affects how people within the company interact and, over time, becomes deeply ingrained within management and employees. Successful data literacy programs mean having ample support at the C-suite and empowering everyone to champion it, including making data everyone’s business.