Published on the 05/02/2020 | Written by Heather Wright
What’s it look like and how can you develop a data driven business strategy?…
Lots of data and great visualisations do not make a data driven business. There’s more to it than that – but for companies who get their data driven business strategy right, there are big wins to be had.
That’s the message from Tristin King, a business intelligence consultant and founder of 6Risks.com, who says a data driven business strategy enables a business to have more certainty of achieving goals and provides the ability be more proactive and reduce silos.
King, who is leading a workshop at the 2020 Business Intelligence Summit in Auckland in March, says a data driven business will understand earlier when things are not on track, enabling it to be pro-active faster, solving risks before they become issues.
“Teams can focus on performance, strategy and innovation, rather than fighting fires,” he says.
“There’s a real propensity for BI teams to provide a lot of details at the wrong level.”
At the same time, King, whose work has also included a stint as head of technology for Jucy Group where he implemented a data driven strategy, says being a data driven business provides greater autonomy: Organisational understanding of goals and the progress toward those goals, gives teams context to what they are delivering.
“As these goals become embedded they support decision making at all levels: ‘How does what I’m about to do reflect our goals?’. Goal driven decisions can be easier to make and allow for greater autonomy within teams,” he says.
Three indicators of a data driven business
- Goals and objectives are well understood by everyone across the organisation. People can make a direct connection between what they are doing and the impact it has on the overarching organisation goals.
- Leadership teams don’t operate in silos, team members understand that achieving an organisation’s goals is a joint responsibility and they fail together and succeed together. The leadership teams challenge each other objectively leveraging results and outcomes – made visible through data – rather than assumptions and hunches.
- The business intelligence team is seen as a critical component in the business to aid decisions, rather than just a ‘report team’. Engagements between the BI team and the business are focused around the problem the team is trying to solve, rather than the information they need to see.
Data driven BI practices
“The difference between a goals focused organisation and a data driven one is the extent to which data and visualisation of data is leveraged to produce successful outcomes,” King says.
Visualisation of data is decision focused.
“The approach I take is very much outcome or metric focused – what are the key metrics the business needs to support this year?”
His metric-centred approach uses a metrics ‘tree’ consisting of three levels based around the questions of why, how and what combined with what King dubs ‘PLAY’ (purpose, levers, actions, yield).
“The top level are the key metrics, which are generally slow moving – things such as profit – where you’re typically getting results quarterly. They’re the focus of boards and CEOs and are based around the Why question answering ‘do we need to act?’.
“Why data describes a company’s purpose.”
Supporting the key metrics are metrics which measure the progress towards goals, tell a company if it’s on track or not – and enable teams to take action early to resolve potential issues, such as reduced profit. They’re the focus of leadership teams and are based on the How question: How do we act? They provide the information about the reason things aren’t on track (levers) and the things that need to be targeted to drive a solution (actions).
The final layer is What, and answers the question ‘are our actions working?’. It’s mainly operational data and is highly granular, enabling teams to know very quickly if the actions they are taking are making a difference (yield).
“When these actions are ineffective, this data supports a team to change tack, or when actions are effective it supports them to do more of the same.”
“People think about the top layer but they don’t think about the other two and they are probably more critical to drive good results,” King says.
“The change for business intelligence teams is to start introducing these layers and to start thinking about what the metrics you’re providing are trying to drive and the questions each level of the company needs answered.”
King says there’s a real propensity for BI teams to provide a lot of details at the wrong level. Boards, he notes aren’t interested in all the detail, they want to know if a company is on track or not. Senior leadership, on the other hand need the additional level of information to enable them to get back on track if required.
“A lot of BI teams provide daily information at the top level when it is really not required. It muddies the water and can pull that level of the business away from what their focus needs to be.”
Technology alone is not the answer
Although some decisions can be automated, King says most will required informed people to make the decision.
“People are central to an organisation becoming data driven. Providing the right information to support the right questions will only be effective if the organisation knows which questions to ask, when to ask them and can take action in the right way.
“The BI team will need to support such a change by thinking and engaging in new and different ways.”
King’s workshop at the 2020 Business Intelligence Summit will look at the tools to support change and how to develop a strategy to start driving a data driven change in your business.
Registration for the March 30-31 2020 Business Intelligence Summit.