A while back in another post I mentioned we would look at what is data driven in a later post. While I didn’t say how much later, it’s still been a bit longer than I intended. So now (better late than never) we’ll look at what is data driven.
Being data driven is far from a new fad. Businesses have relied on data to make informed decisions for decades. As computing power has increased, and new solutions created to harness the power of data produced by companies, so being data driven has become steadily more popular.
Let’s take a simple scenario. Mega Bolts has seen an increase in sales in the last month. If Mega Bolts is data driven, they would see the sales increase is from a new advertising campaign. The launch date and sales increase match and customer feedback also mentions how they like the adverts. They would then take the decision to extend the campaign.
If Mega bolts is not data driven, the sales increase may well be noticed. But why sales have gone up remains a mystery. They may guess it is down to the advertising campaign, but without any further customer data it remains a hunch. They may also decide to not extend the campaign, or even change it.
As you can see, being data driven carries some very real benefits, including:
Data has the power to provide amazing insights into how a business is run. It can help highlight where costs can be reduced, or aspects of the operations made more efficient. And through becoming a smarter business, it also becomes one better placed to weather turbulence or handle a rapid increase in size.
Reduce risk and increase confidence.
While people often rely on past experience combined with intuition to make decisions, this carries a very real risk of being wrong, and thus causing damage to the business. When data provides evidence and can point to a positive change, it is reducing risk of a decision being incorrect. This alone can be hugely beneficial, severely limiting the ability for people to meddle with tactical and operational activities.
On that point, by adopting a data driven approach you can show your staff the direction the business is taking. By involving staff you make them feel valued and, in turn, they become more committed to trying to achieve the end goals. They see a purpose, a reason for being there.
See the future
Data is essentially about the past. Being data-driven is seen as using that past data to decide what to do in the future. So it’s a reactionary tool.
That is certainly true when a business uses data in a narrow way, such as reviewing sales information. But data can provide so much more. By using the right tools, data can also help to spot new business opportunities within current or new markets. Data can also identify potential threats to the business, thus allowing more time to plan ahead to avoid or defend against upcoming hazards.