Why your business isn’t growing
As a business owner or CEO, challenges are inevitable. These challenges often lead to getting stuck without any business growth, falling behind and in the worst case scenarios, shutting down altogether.
For some, they stem from their people.
For others, they rise from their product.
However, a common cause for stagnation in this day and age is the failure to keep up and embrace technology.
Specifically, making use of technology to collect and analyse data effectively and hence, enhance your organisational data literacy. In this digitalised and data-driven world, enhancing your organisational data literacy wouldn’t put your company ahead of the game, but on par with everyone else.
The decision to invest in data literacy has time and time again proven to make or break one’s business. In this article, I will be covering the different levels of data literacy an organisation could have and how neglecting this aspect can cost the growth of your business.
Achieving business growth through CX Fluency
If you’re at a point where you’re looking to grow your small business and you’re unsure on how to proceed, this article is meant to speak to you. Scaling up requires investing a great deal of your company’s resources in various possible sectors of your company and hence, it is important to know why you are going to invest, how much of your resources you are going to invest and which sector you are going to invest in. Retaining and acquiring both your customers and staff is critical. And the only way to do so is to align your people and their practices with the company. This is what is meant by becoming more fluent in Customer Experience (CX).
How do you know if a particular investment of your resources, be it in staff welfare or a new customer loyalty program, will lead to actual growth? There’s only one thing you can trust to make these decisions: Data. The numbers never lie. Hence, whether or not your company is data literate can make all the difference.
What is Data Literacy?
Bernard, Marr & Co defines:
Data Literacy as the ability to communicate, write and read about data in context.
For an example of what it means to be data literate, check out the definition by Geoff Hope, the former Capterra Analyst, below.
“Data literacy is also a way of thinking in terms of data. The data literate person doesn’t just think in generic terms — such as, “Did sales increase?” They think in terms of data — “Did Q1 website conversions among women ages 18 to 34 increase as a result of that email campaign?””
— GEOFF HOPE, FORMER CAPTERRA ANALYST
How Data Illiteracy Breaks Your Company
Drop in Business Value
The failure to adapt and become data literate has clearly shown to be detrimental to companies, especially small and medium enterprises. According to the Gartner Annual Chief Data Officer Survey done in 2019, poor data literacy is ranked as the second-biggest internal roadblock to success.
“By 2020, 50% of organizations will lack sufficient data literacy skills to achieve business value.”
— GARTNER ANNUAL CHIEF DATA OFFICER SURVEY, 2019
Increase in Business Losses
Similar to how being illiterate causes civilisations to be ignorant and suffer in poverty, data illiteracy causes your organization to be backward and suffer losses you could have avoided. Sadly, too many business owners are still under the wrong impression that learning how to read and analyse data is primarily someone else’s job and only meant for people working in the Data Analytics field.
Inability to Make Timely Good Decisions
If an organisation makes hundreds to thousands of decisions a day and are taking shots in the dark without the aid of interpreted data (information), the quality of their decisions will be prone to errors and human biases. If an organisation can’t learn the impact of those decisions through collected data (information), poor decisions can’t course correct fast enough and good decisions can’t be doubled down upon fast enough.
How Data Literacy Makes Your Company
Pandemic-caused Necessity
With the pandemic striking everyone hard with lockdowns and social distancing from early 2020 onwards, the offline to online shift only meant that learning data literacy is more urgent for businesses now more than ever. With COVID-19 being a virus that’s hard and possibly impossible to eradicate, this digital shift is evidently not something temporary. And many companies did realise that.
“Teeny tiny viruses are one of the biggest threats that humanity has ever faced. They are behind some of the most devastating pandemics ever known. Even with all of modern medicine, we have only eradicated one virus, smallpox, which required a decades-long global mass vaccination effort.” – A 2020 Article on Vox
Increased Productivity Levels
McKinsey Digital’s Kate Smaje, Senior Partner and Global Co-Leader says “The crisis has forced every company into a massive experiment in how to be more nimble, flexible, and fast.” That means higher productivity levels and hence, better results.
“Business leaders are saying that they’ve accomplished in 10 days what used to take them 10 months. That kind of speed is what’s unleashing a wave of innovation unlike anything we’ve ever seen.”
— KATE SMAJE, A SENIOR PARTNER AND GLOBAL CO-LEADER OF MCKINSEY DIGITAL.
Increased Employee Morale
Being a data literate company doesn’t just lead to increased productivity and results, it also increases your employees’ confidence. A Business World article revealed that 94% of workers who work with or use data in when doing their job, state that having such data helps them to do their jobs better. 82% also believe that being better able to decipher data would give them more authority in their positions and help their company be more successful within their niche.
Who is Data Literate today?
Startups vs MNCs
Contrary to popular belief, not every technology startup is data literate and not every multinational corporation is data illiterate. The 2019 Big Data and AI Executive Survey, involving very large corporations such as American Express, Ford Motor, General Electric, General Motors, and Johnson & Johnson as participants had 92% of survey respondents reporting that the pace of their big data and AI investments is accelerating. More than half of the participating companies reported that their investments in big data and AI now exceed $50Million.
Myself
I’ve worked with organisations of both sides of the scale and hypothesise that an organisation’s lack of savviness in collecting and interpreting data can be an Achilles heel that will handicap growth. As a digital innovation practitioner myself, I’ve utilised qualitative and quantitative data in marketing strategy and new product development. I’ll skip repeating the benefits of utilising data (information) in an organisation as its importance is already stated in the beginning of this article.
What can you do?
Now, I’d like to propose a maturity model of data literacy that can help you decide if your organisation is lagging or at the forefront of digital innovation. The effects of how data literacy and digital innovation positively correlate should be self evident from Fortune’s Top 10 Fastest Growing Companies.
How data literate do you think these 10 fastest growing companies are? (Observation: more than half of them are internet technology companies working with software.) Read the descriptions of the 5 levels of organisation data literacy below and identify what level your business is at currently.
5 Levels of Organisation Data Literacy
Following the Organisation Data Literacy (ODL) Maturity Model, there are 5 organisational data literacy levels.
Level 1
- Your organisation collects some raw data without a meaningful categorisation.
- Your organisation has no data analysts or trained staff in data wrangling.
- Your executive team doesn’t understand or sees little value to invest in data management.
Level 2
- Your organisation collects raw data with categorisation.
- Your organisation has one or a few data analysts (or a function head takes that as a secondary role).
- Your executive team and decision makers relies on data analysts (or function head) are statistically savvy.
Level 3
- Your organisation collects cleaned data with with meaningful categorisation and correlation consolidated in a dashboard or report.
- Your organisation has an experienced data scientist (or a function head takes that as a secondary role)
- Your executive team is data savvy enough to ask the right questions.
- Not all collection and interpretation of your key business data happens in real-time.
Level 4
- Your organisation makes data-driven decisions as all decision-makers understand the value of data and statistics and know how to ask the right questions.
- Some key decisions are still made without the aid of data.
- Collection and interpretation of your key business data happens in real-time with a pool of tools and infrastructure.
Level 5
- All decisions made within your organisation are data-driven and all decision makers can obtain and make correlations by obtaining the right data easily.
- Collection and interpretation of all your business data happens in real-time with tools and infrastructure addressing the needs of core business units (e.g. marketing, finance and product).
- All decision makers can tell if data presented is biased and can make suggestions on how to improve the presentation and suite of tools.
Which level is your organisation at? What would you and your team need to do to get to the next level?
How to use your Data Literacy?
Once you are data literate, you’re able to make sense of the numbers and data captured from your customers’ actions and attitudes towards your product and brand. Hence, the more data literate your company is, the better you can understand your customers and anticipate their needs and wants as well. When you use this newfound understanding of your customers to make decisions on your business direction, your company becomes more customer-centric. One way to gauge your business’ customer-centricity, is to consider yet another model: your Design Maturity Level.
Design Maturity
According to Invision’s Study reported by UXPlanet:
The Design Maturity Level of a business is the extent to which it incorporates design thinking practices in their overall system.
Design Thinking is a human-centered, iterative process used to tackle problems. This process is usually broken down into 5 stages. Businesses that assimilate design thinking into their processes are more likely to see positive outcomes concerning product, position, and profit. Hence, the higher your business’ Design Maturity level, the more mature and customer-centric it is.
We have created a quiz for you to take and find out your company’s Design Maturity Level, complete with instructions on how to proceed should you wish to upgrade your company to the next level. Distilled from discussions with more than 50 design leaders in the region, this quiz is based on the Design Maturity Model viewed through the lens of the APAC perspective, to provide an indication of which level your business might be at.
The Next Frontier
Not all technology startups are built equal. I’ve worked with startups that are in Level 2 and 3 of Organisation Data Literacy and see how their growth is handicapped by a velocity tied closely with data (information) management. The very best technology startup teams I know operate at Level 4 and 5 at the get-go and enjoy a competitive advantage and adaptive resilience as an organisation. These teams don’t plan in annual cycles, they plan in much quicker iterations.
The NYTimes has reported how Tech Giants are paying huge salaries for Artificial Intelligence (A.I.) talent. “Demand outweighs supply” the article concludes. And that was a 2017 article. One can only expect that statement to hold much more weight today in our highly data-driven and ever-improving digitalised world.
If you understand the nature of all computation is a series of inputs and outputs and understand the potential of A.I. A future where machines collect, analyse and build upon heaps of data in real-time is not a matter of IF but a matter of WHEN. It’s a future where competition plays by a fraction of a second very much like the global financial markets taking advantage of information asymmetry through speed of data transmission and better software today. That future is restrained presently largely by the limits of computational power which is still doubling every 2 years according to Moore’s Law.
Progress is non-linear from here. If you need some help and coaching in aligning your people and their practices to ensure business growth, check out our Customer Experience (CX) Strategy Program for Enterprises by clicking the button below. Get your first consult with us for free.