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We’re all familiar with the mantra that knowledge is power. In today’s business environment, we have effective business intelligence tools to cultivate knowledge through gathering and analysing business information. But, to truly make the most of the information we collect, and the insights we generate, it’s important to put data in the hands of the right people. Doing this well will help streamline compliance and financial reporting, drive higher revenues, bring costs down, and ultimately deliver competitive advantage.
In the digital age, organisations generate huge amounts of data about finances, operations, customers, and more. Instead of hoarding data and insights at senior executive or team leader level, it makes better sense to democratise access to this data and analytics – ensuring information is available to anyone who makes daily decisions.
Here are six ways business leaders can use data to fuel a healthy growth culture:
1. Measure what really matters
Today, every business has access to a wealth of real-time business data thanks to the wider use of automated software. However, it is all too easy to expend energy on measuring the wrong key performance indicators (KPIs). For instance, many businesses focus on measuring lagging KPIs like employee satisfaction or sales per employee.
These KPIs will tell you that something has gone wrong, but they won’t predict when something is about to go wrong. KPIs that help you predict trends are more useful. For example, you could look at how many meetings the sales team is conducting weekly and their sales conversion rate to forecast monthly sales. This enables you to correct course if forecasted sales are weak.
2. Understand how your metrics will affect thinking and behaviour
Any economist will tell you that you’ll generally see more of the behaviours you incentivise and fewer of those you penalise. Once you tie KPIs to employee rewards or performance reviews, you can be sure your colleagues will do everything they can to meet the targets you have set. Often, the law of unintended consequences will come into play.
An example is net promoter score (NPS), which is a simple metric that asks customers how likely they would recommend a company, product, or service to a friend or colleague. Conversely, NPS can aggravate customers, especially if your sales or service representative encourages them to rate the interaction highly so your colleagues can meet their target.
The wrong KPI can also demoralise people. For example, your sales team may get a target to sell 1,000 units of the latest product in your warehouse, but a competitor drops the price of their similar product. Before your sales and marketing team can respond, their KPI will be affected for the current financial period. When the negative data is fed back to the sales team, they may feel discouraged.
3. Empower people to make decisions
As we move to a digital and remote workforce, your organisation could benefit from decentralising some of its decision making. You can promote accountability, innovation, and high performance throughout the business by giving the right people access to data, enabling them to make faster operational decisions in areas such as procurement, sales and customer service. This allows your business to be more agile and helps improve employee satisfaction and engagement by empowering people to do their jobs more effectively.
4. Encourage data-driven insights sharing, not hoarding
In the most successful businesses, you’ll notice people sharing insights from data, ideas, workloads, and best practices to increase performance. You should encourage people to be transparent in the knowledge that the team will collaborate to solve problems. Incentivise them to share data-led insights and ensure they know who to reach out to if they need assistance. Also, trust them to make good decisions and accept that mistakes may happen – the business and its people will learn from them.
5. Invest in the right tools and train people to use them
Technology is key to driving better decision making. If possible, centralise around a single, interconnected data platform that enables employees to share information. This negates the need to synchronise and search for documents across different apps. The right information is always ready to share.
Carefully review which analytics and data tools will help you achieve your goals. Often, it’s about selecting the platform your cloud software will operate on or integrate into, or a particular provider that takes the same approach with all its software packages to ensure compatibility. In doing so, you will keep everyone on the same page.
For managers, this level of integration creates a level playing field that makes it easy to see what the state of the business is. Tools with intuitive features such as dashboards and visualisations can make data analytics accessible to a wider audience. It’s also important to provide training and support that will help people make the most of the software and data.
6. Run a business on real-time insights
With the right tools, processes and culture in place, you can evolve your business to benefit from real-time insights. This enables decision-makers to identify trends and opportunities, and to track, analyse and better manage customer and supplier interactions. This can become a real competitive edge in a volatile time when challenged with staying on top of changing business conditions.
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First published on: ForbesAfrica