“Without data, you’re just another person with an opinion.” William Edwards Deming
With the ever-present digital world and the linked profusion of data, we’re hearing “data-driven” being applied more and more to organizations that are or want to be more geared toward data in their management.
Is “data-driven” just another one of those terms that spreads and turns viral for commercial reasons, or is there particular linguistic snobbishness behind it? Do the people who use it have a deep understanding of its meaning?
Businesses steered by data have tools and abilities at their disposal to make better decisions based on evidence, but they especially foster a mentality and culture among their individual members. So let’s take a look at what data-driven people and organizations are like and what they do with the data.
Our digital trails are continually growing, and their origin is not just in the operational transactions of management systems. Recording and collecting data is a must for analysis, but having all the necessary data in time, in addition to making sure it is immediately interpretable and manageable is not common or free. Data-driven businesses don’t only collect data by intuiting its value, but instead they focus on the data related to cogent questions and key metrics, working to ensure that they are precise, “clean” (often only after laborious processes), unbiased, and – perhaps above all – that they are reliable for everyone.
Almost all businesses use spreadsheets, and they’re turning into more sophisticated tools (SQL and Power BI, for example) when Excel and/or their teams’ abilities fall short. Data becomes more valuable if it connects to other data in the business (or outside of it), and it’s important to be aware of that from its design. Being able to access different sources without significant technical effort and democratize access and the capacity for analysis in an orderly way expands its depth and increases its value.
The tools for consulting and analysis are becoming more and more accessible and versatile. Filtering, grouping, and adding to turn detailed bulk data into higher-level quantities helps our brains understand what’s going on. For anyone, regardless of their position, having some mastery (both technical and functional) over tools beyond Excel (like Power BI) is, even today, a competitive advantage, and access to those tools and to high-quality training resources is more in everyone’s reach than ever before.
Having a lot of data and reports doesn’t make us data-driven or good analysts. Even though most businesses evolve analytically from reporting, this tends to focus on showing us what has happened by providing references and baselines. To be more data-driven, we must focus on the future and try to understand why numbers change by trying to shed more light with tests that call into question unconscious convictions. A few definitions and this table from Thomas Davenport, a scholar and author on business management, encapsulate these focuses.
Reporting: the data organization process to produce summaries of information in order to monitor the situation from different business areas.
Analysis: the transformation of data assets into competitive insights that drive business actions and decisions by considering people, processes, and technology.
What happens now?
What will happen?
How did it happen and why?
What is the best option
What is the best/worst
|Davenport: “Analytics at work”|
All too often, data is in silos (systems, functional or isolated in poorly understood “property”) that tend to reduce scope, increase effort and expand deadlines, and definitively limit its value. Data-driven businesses encourage sharing data and sources because they know that the whole tends to be greater than the sum of its parts and that worth doesn’t necessarily lie with knowing more (with regard to data) but with connecting more, questioning, delving in, anticipating, and deciding or getting advice on the decision efficiently.
Once we have data that is relevant, clean, and reliable, and it is accessible, consultable, connectable, and shareable, we need the most important thing: we need people with the right skills and mentality. People who are curious who ask the right questions, with a critical spirit and the conviction that data is vital for better understanding, evaluating, and deciding, impacting the surrounding environment. In a data-driven business, people are empowered to resolve problems by having the most data possible on their side. The mentality is one of constant improvement, and assumptions are questioned by looking for the evidence that supports them and considering metrics from the very beginning. Data-driven individuals don’t need to be top specialists in statistics or technology, but they do have a good attitude about analysis and know how to gain skills in the search for truth.
In a fast-changing world that is focused on execution and puts pressure on results, how can we decide what to do tomorrow without a good understanding of reality today, or without considering trends or possible scenarios in the future? Data must continue to grow as the raw material for our decisions.
At Ferrovial, we’ve been investing in technology, processes, and people with technical, training, and administrative initiatives for years. Some examples include DataLAB (the center for specialists in data science), Data & AI School (training in data divided out by level of understanding and profile), People Analytics Bootcamps (open events for sharing internal and external knowledge), and Power BI (an analytical technology expo for everyone), etc. With this focus on the way to being ever-more data-driven, we’re expanding our abilities, and we support our employees in making better decisions by fostering a culture that is continually more aware and active in terms of the value of data.