Why Data Matters

In my last article, 'The Evolution of Workplace Skills,' I talked a lot about bringing people along on the journey of developing data literacy in the organisation. But that discussion was based on the assumption that everyone is eager to join in on this journey. As many of us have experienced, this isn't always the case. When it comes to data and data initiatives, people often question the value of our efforts. They ask, 'So what? Why is this important?' Some even admit they don't understand what we mean by data or how they use it in their daily work. These are common challenges you'll encounter when trying to emphasise the importance of data in organisational decision-making.

In this article, I'm going to discuss an approach to explain why data is vital and what it means in the broader context of the organisation. Let's start at the highest level: strategy. Whether you call it organisational or corporate strategy, we all understand it's the direction and end goal that we set for our organisations. To implement strategy, it needs to be broken down into specific, strategic business goals. Some may refer to these as OKRs (Objectives and Key Results), but I'm a bit old school and prefer the Kaplan and Norton balanced scorecard approach to implementing and measuring strategy.

Breaking down strategy into business goals, the first set of goals is generally financial goals. Let's be honest, if you're in business, making money is crucial for staying in business, even for non-profits. Achieving these financial goals requires a focus on customer-related activities because that’s where you generate revenue and provide value to customers. Once you understand your goals around your customer, you'll look at internal processes - which internal capabilities and processes are needed to deliver your promises to the customer.

Lastly, to deliver on these internal processes, you'll need to establish learning and growth objectives. This involves skilling up your people and defining roles and responsibilities to support those internal processes.

This approach takes you from high-level strategy to implementable strategic business goals, leading to various initiatives or projects generally categorised into process, people, and technology. It's at this stage you might encounter your first resistance to change, necessitating business change enablement, which I'll cover in a subsequent write-up.

Once your people, processes, and technology enablers are in place, they dictate how your business operates and delivers its value chain. This could be transforming raw materials into sellable products or leveraging skilled personnel to deliver consulting services. Regardless of the business model, it will be delivered through your operational processes. And yes, you'll face pushback here too, requiring further change enablement.

As your operations run, data is produced from systems like ERP and CRM. Contrary to the belief that data is merely a byproduct, it's an asset. This data includes invoices processed to customers, invoices received from suppliers, general ledger entries, CRM interactions, HR data, and more. These data points become your actuals when it comes to reporting and analysis.

Throughout this process, you'll also engage in planning, setting targets, and forecasting. You’ll then measure actual data against these targets, which can include financial goals, customer metrics, internal process benchmarks, and learning and growth targets. This helps you understand your performance and whether you're on track to deliver your strategy. If not, adjustments can be made, and this cycle continues, feeding back into your strategic planning.

So, in summary, data is crucial because it forms the feedback loop necessary for tracking and evaluating whether your strategic goals are being met. Recognising this is the first step in understanding and communicating why data is important for organisations. In future articles, I'll dive deeper into how to bring this data to life, enact change enablement strategies, and other essential aspects of data management.