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Despite the years of investment in data initiatives, many organizations are still attempting to turn into really based on data. How Harvard Business Review Reveals that 91.9% of the management quotes cultural obstacles, not technological restrictions as the largest barrier to data transformation. The journey to turn into based on data is then more a challenge of individuals and strategies than a technological problem.
While corporations are racing for accepting advanced analytical and artificial intelligence (with McKinsey By reporting that 92% plans to extend AI investments in the next three years), often ignore fundamental work on establishing clear strategic goals in accordance with business goals. Only 1% of leaders consider their “mature” organizations in their data and implementation of AI, emphasizing the gap between technological adoption and effective integration.
It will turn into a business transformation requires business transformation, as is the digital efforts of transformation over the past 25 years. Success requires a slight startup, with concentrated initiatives that will let you learn and adapt before scaling.
In this text I’ll present my basic steps to build a truly based on given organization, starting with the strategy, and not jumping straight to technological solutions.
1. Define the most significant indicators that drive your organization
The decision to measure is the first step to becoming a data -based organization. Identify to 10 key indicators that capture the essence of your organization’s operation.
For example, a retail company can track stock turnover, customer acquisition costs and average transaction values, because they affect profits and performance. On the other hand, SaaS can focus on the departure of shoppers, monthly repetitive revenues and users’ involvement to know their growth and sustainable development.
In our company, we will track indicators similar to the variety of potential customers generated each month through marketing, sales and network creation. Then we could assess the quality of these potential customers and the variety of transformed into customers, following the total potential customers, top quality potential customers and closed offers. Providing accurate and adapted to the business goals of these three numbers ensures clear insight into performance. In this fashion, you avoid overloading information and make consciousness, and thus more practical decisions. It also helps to allocate resources properly.
2. Define key values for healthy business framework
After identifying the indicators that intercep the essence of business operations, the next step is to define key values signaling your organization’s health. These values act as reference points, helping to see if your organization is on the right track and lets you introduce proactive corrections.
“Healthy” business frames are not universal; It needs to be adapted to the industry, company size and strategic goals. For example, in retail conditions, maintaining a low stock of stocks will be a sign of ineffectiveness, while at Saas, a high indicator of shoppers’ departure may indicate problems with customer satisfaction or matching the product market.
To create a solid frame, ask questions similar to:
- What is the success for my company?
- Which values reflect our basic mission and goals?
In our company, we focus on values that reflect each our short -term goals and a long -term vision. This may include the maintenance of a certain percentage of lead conversion coefficients, ensuring the results of customer satisfaction above a specific threshold or achieving a specific rate of a repeated increase in revenues.
3. Rate your current reality
After defining key business values, the next step is to evaluate where your organization is currently standing. This includes a comparison of current performance with the comparative points you set:
- Analyze the data: Review the existing data to see how well you meet key indicators.
- Collect the opinion: Talk to employees and clients to get qualitative information about customer operations and satisfaction.
- Identify the gaps: Specify the areas where perfect and where improvements are needed.
In our company, we frequently check our progress in the field of indicators, similar to conversion rates and customer opinions. Understanding our current reality helps us make conscious decisions and determine the priorities of actions that are in line with our goals.
4. Provide leadership
Because one of the biggest barriers in becoming data based is culture, the adaptation of leadership is essential. Changing culture often begins at the top, and leaders who consistently focus on making decisions based on data.
Establishment of normal management meetings (monthly or every two weeks) covering all key managers at level C. Unlike typical status updates, these sessions should apply to the following elements:
- Review the performance in relation to the agreed indicators
- Satisfying resistance points in the organization
- Make decisions based on data
- Provide consistent messages on the importance of information
Visible executive involvement helps to transfer culture from intuition to creating decisions based on evidence, creating an environment supporting the essential data transformation.
5. Start with the easy with the tools you know
Despite the rush to just accept advanced analytical and artificial intelligence, many organizations may not need complex software to be based on data. Start with easy, available tools that everybody can understand – it might prove that they are every thing it’s worthwhile to start.
In our organization, we identified only three key indicators that actually mattered. Tracking these numbers in the basic spreadsheet ensured all the observations essential to make informed decisions and increase growth. The transparency and focus of this approach enabled us to detect trends, discover bottlenecks and effectively allocate resources without complex systems.
Application
In search of a data -based organization, do not forget that technology is only a tool, not a destination. The real transformation results from determining clear goals, supporting the culture of creating decisions based on data and starting from scratch.
Focusing on what really matters and adapting your strategy with business goals, you may transform data into the strongest ally. Take simplicity, cultivate leadership adaptation and let your strategic vision travel. Ultimately, it isn’t about how sophisticated and fashionable your tools are, but about how you utilize them to satisfy business needs.