Why we need to build a data-driven culture?

Disruption

If there is one word that keeps companies and people sleepless in the business world it is “Disruption”.  Some disruptions are hype while others are really like lightening which strikes at the most unexpected moment. In the last two decades of the new millennia we have seen disruptions like one technology completely obliterating another, business model changing from planned economy to shared economy, ways of doing the routine things changing completely different at another level. At Knowillence our goal is to help clients see and sense these disruptions and position themselves to get lifted instead of getting drowned. We focus more on trends than on technologies.

This post will touch upon few topics relevant to most organizations to afloat in the waves of disruption and also get the mindset to learn about few things that will help them prepare for disruption.

Change

Change is not moving from one state to another. It is the process of becoming  and not more about attaining a state. Change keeps us relevant. I think of change in terms of three factors for any organization I have worked with. They are listed below.

1. Capability
2. Maturity
3. Agility

I am a big fan of Capability Maturity Model from Carnegie Mellon University. I spent early years in my career on projects that were executed using this framework. One of the most powerful learnings for me from CMM model is

CMM model is not a vertical ladder progression model nor it is a side to climb upward at a slope. It is instead a step by step framework where you acquire a capability to climb to next step and stabilize and then climb to next step. This is why I love this framework. I am sure lot industries will have their own frameworks to handle change and progress and it is worth reading the ones relevant to your industry.

Agility is the next important factor after capability and maturity. Organizations are embracing agile thinking in all functional areas not just in IT project management. Companies break the internal barriers for the teams to work cross-functional and break external barriers to help their customers reach them in whatever channels that is conveient for the customer. One good example is lot of companies use Twitter as helpdesk and being transparent about customer complaints and how they resolve it. In this new age agility is the catalyst of growth.

Organization Structure

Gone are the days when organization data-driven culture which was looking like a tree i.e hierarchical. Now-a-days it is starting to resemble like periodic table where people are grouped based on relevant affinity factors to enable close collaboration between stakeholders. The days of command and control is overturned with collaboration. The future structure of an organization will look rhizomatic where there will be no center power and everything is connected to each other. It is very important to experiment with different organization structures and see which one delivers successfully for the project or goal. I love Amazon’s way of forming teams whenever they create a new product. The recent book Amazon Unbound sheds a great amount of light on how Amazon launches new projects. In some of our undertakings which are from family-run business we advised them to take a look at their organization structure and change it to transform them. Whenever organization structure changes it is a challenge on tracking how people, teams, business units are preforming. 

Innovation

Innovation disrupts the way things are done, it questions the status quo and helps companies leap-frog their competition. There are two types of trends we monitor in innovation from a disruption point of view.

1. Sustainable Innovation – conscious changes to the company products and services to benefit the environment and society in long term.
2. Disruptive Innovation – create new market, new value, new use for products or services.

We gauge the trends in both sustainable innovation and disruptive innovation. For example we focus more on sustainable innovations for our clients in textile industry in India and focus more on disruptive innovations like NFT store for our clients in retail and ecommerce. We need to use a framework to evaluate these changes and its impact on the organization and decide on whether to ride this wave or just stay afloat.

Transparency

If there is one idea that was propelled by decentralization idea and anti-establishment view, it is transparency. Now the conscious consumers want to know where the raw materials for your product and service came from. They want to make sure you did not use forced labour, slavery or illegally mine the resources for your production. Transparency is the currency of trust and trust is a competitive advantage. The only way to show your transparency is to show the data that people need to know your values and what your brand stands for. Companies are having transparency initiatives which are run by core management team because they know that transparency is strategically important and not a tactical project. 

Entropy

The organization structure, complexity of processes, learning curve for the right tools to use are making the enterprise outcomes unpredictable and also creates a higher degree of disorder and confustion. This is a reality. Human beings are the only organisms that can reverse entropy. That’s why reversing climate change entropy is vested with human beings. The number one challenge posed by change and growth for a company is entropy. To get a clear view of this entropy we need to collect data from every nook and corner of the organization. Only a data-driven organization can handle entropy very well and increase predictability which is directly related to stability.

Decisions

Decisions have domino-effect. Everyone in the organization makes decisions and these decisions are mostly based on intuition and instinct and not based on data. Research has shown that human beings are good at over-estimating short term loss/gains and under-estimating long term loss/gain. Our decisions must be based on data and free from bias. You can read the book “The Art of Thinking Clearly – Rolf Dobelli” that lists 99 biases and illusions. We need to have a system that not only gives correct answers, it should also ask relevant questions to refine the decision. We are the choices we choose and decision is a choice. It is a must in today’s world to know the dominoes of the decision we make. 

Conclusion

We cannot control something we cannot measure. To measure something we need a metric and track it. In this millennia building a data-driven culture is a requisite for survival. Without data it is difficult to create an action-biased team which overcomes all the challenges to deliver the ultimatum. In order to be transparent we need to show the data. In order to reduce entropy we need data to troubleshoot the problems. Data is now the fountain of innovation and is perishable sometimes and perennial sometimes. The digital twin model is completely data driven. I hope this post was thought provoking for you to ponder on how to build a data-driven culture for your organization. You can reach us or connect with us for any help you needed in this area.