By: Dr. Marina Theodotou
As the volume and velocity of change and data brought by digitization, advanced technologies, and demographics increases exponentially, making sound business decisions using data becomes critical. However, not all data is useful or reliable. This is problematic for business leaders because unreliable metrics can lead to incorrect decisions and ultimately, result in making wrong strategy moves, increased costs, multiplied risk, and lower performance.
Business leaders can mitigate these risks by ensuring data adds value their organization. But where do you begin? Based on over 25 years of experience working in three verticals (banking & finance, management consulting, learning and development), three continents (Americas, Europe and MENA) and three sectors including private, non-profit, and government, I gleaned five traits of value-adding data:
Strategic data connects day-to-day operations to leadership strategy and important business objectives. For example, if a bank has a strategic goal to capture 25 percent market share in three years, strategic data includes the number of new accounts opened and number of accounts closed.
Data that is not aligned with the cadence of business in your organization will be ineffective. More than ever, timely data is critical to sound decision making due to the velocity and volume of change. It is no surprise that stock market performance data is reported several times per day. The timeliness of the data impacts decision making.
Often, organizations spend resources collecting and measuring data that is not useful, strategic or timely. Business leaders must evaluate the cost of collecting the data against the value it brings to decision making before investing in resources to collect that data.
Good data tells a story that is meaningful to the business. Business leaders must ensure that the data collected is interpretable, easy to understand and translate into employee action. Data that is complex and difficult to interpret is not useful and can increase unnecessary costs.
Data must be easily accessible and visible to both those affected by it and those making decisions from it. There are several software programs in the market that provide data depiction capabilities which in turn facilitate data analysis and consideration in decision making. Making the data easily accessible and visible can improve employee commitment and engagement to achieve business results.
Collecting data that is strategic, timely, cost-effective, interpretable and visible can empower business leaders to make more data-driven, reliable, and effective decisions which can lead to better risk mitigation, cost curtailment and improved performance.
The opinions are those of the author alone and do not necessarily represent those of the Defense Acquisition University and the Department of Defense.
Dr. Marina Theodotou is a change leader at the Defense Acquisition University at the Department of Defense. Dr. Theodotou has stood up new initiatives and led diverse teams solving problems on innovation, entrepreneurship, customer satisfaction, financial market efficiency, learning methods and culture change in 3 industries (Learning & Development, management consulting and banking & financial services), 3 sectors (government, private and non-profit) and 3 geographies (Americas, EU, and MENA). Marina holds a doctorate in education specializing in organizational change and leadership from the University of Southern California, and master and bachelor degrees in economics from the University of South Carolina. She is a certified Lean Six Sigma Black Belt.