Why It’s Important to Make Data Driven Decisions:
Trust your gut.
You may have heard that common phrase thrown around when a challenging decision must be made. While intuition can provide the spark, it’s the data, facts, and metrics that provide the ability to assess a situation in an informed way. A study conducted by PwC stated that highly data-driven organizations are three times more likely to report significant improvements in decision-making compared to those who rely less on data. No matter the state of the economy, it is essential that as a business leader you can anticipate problems and take action in an appropriate and timely manner. Utilizing a data-driven strategy to make these decisions is the most effective way in doing so.
Data driven decision making uses facts, metrics, and data analytics to make conversant business decisions that align with your company’s objectives and initiatives. This type of decision making empowers your employees to make choices that are better informed and more likely to have a positive company-wide impact daily. Tableau, a data visualization company, summarizes the concept with this statement: “If you can look around your organization and see teams making decisions effortlessly because they are using data, you’ve realized your data’s full value.” A more informed decision is always a better one.
Taking a data driven approach to making strategic business decisions yields a more cohesive work environment. Data can establish a common language across different departments and therefore increase collaboration among teams. When your data is discoverable, employees can share information with more fluidity and from a single source of truth which can lead to new opportunities and better company-wide decision making.
What does data driven decision making look like in practice? Google is a great example of a larger corporation, who struggled with employee connectedness and successfully utilized data-based decision making to improve their manager training programs. Project Oxygen, their people analytics initiative project, produced data from 10,000 performance reviews and compared that data with employee retention rates. Google used that data outside of Project Oxygen to identify common characteristics and behaviors in their high-performing managers. The HR team adjusted the existing training programs accordingly to be designed to develop those competencies in future managers. From these efforts, favorability scores for Google managers were boosted from 83 percent to 88 percent.
HR specifically can benefit from implementing data collection and analyzation tools into their recruiting and retention efforts. People are a company’s greatest asset, but often the biggest expense so it is essential that HR teams have visibility into hiring, attrition, turnover, and diversity. Not only is it important to understand who you need to be hiring, but also identifying the characteristics of those who are currently performing well at your organization in similar roles. As a part of our executive search and hiring process, Decision Associates utilizes the Predictive Index Behavioral Assessment to identify what qualities are essential for your open position and hiring an individual who processes those characteristics. We believe that filling a role is more than matching skills, but a process that also includes matching innate behaviors.