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3 Critical Steps For Leaders to Build Successful Data-Driven Companies

More and more businesses are arming frontline workers with data to help them make better decisions in the moment, but it takes more than just tools and technology for these investments to pay off.

A recent report from Harvard Business Review lays out the important steps business leaders must take to transform their companies into true, data-driven organizations.

The good news is, leaders don’t have to be data wizards themselves to build successful data-led businesses. But they do need to ensure the right skills are in place and instill a culture in which data use can flourish in the hands of frontline workers such as sales clerks, store managers, nurses, flight attendants and field salespeople.

Done well, the rewards are significant, according to the report, which was sponsored by ThoughtSpot and based on responses from 464 business executives. At the companies succeeding with data today, 72% of executives said employee productivity has increased, while 67% saw improvements in product quality.

But leaders must lay down the foundations for success before data and analytics tools are opened up widely to employees. Here are three key steps the report says business leaders must take to prepare their organizations to become data-first companies.

1. Trust your workers and step back

Many companies have to redesign processes and update decision-making structures as they move to become data-driven, and this impacts all levels of the organization.

Leaders should implement training and adoption programs that engage other leaders and middle managers as well as just the frontline workers themselves. Close to half of executives (44%) cited poor change management programs as a top-three barrier to success — more than any other factor. 

The biggest gains come when frontline workers are encouraged to act on their own initiative, but many business leaders are uncomfortable with this. Executives at laggard companies are 10 times as likely as data-led companies to say their top management doesn’t want frontline workers making decisions (42% versus 4%).

Leaders need to reorient the company around this more democratized model of decision-making. For managers and executives, that can mean leaving your ego at the door and trusting frontline workers to act on their newfound empowerment.

2. Prepare teams to apply the insights they find

Tools themselves should be relatively simple to use, especially if they will be rolled out to a large workforce. More important for leaders is ensuring their workers are trained to recognize which insights are useful, and how to act on those insights when they uncover them.

Frontline workers need to think about the business in a new, more expansive way — “more like managers than foot soldiers,” as the report puts it — and this is an area leaders often neglect. A third of executives in the survey (31%) cited employees’ lack of skills to make appropriate use of insights as a top-three barrier to making decisions in the moment.

To address this, the German loyalty program provider Payback devotes 20% of its training to how to use the tool and 80% to using the data, according to the report. It does this via one-to-one coaching from peers who have already shown they’re comfortable with data.

With the right skills and freedom to act, frontline workers can resolve issues on the spot without the intervention of a supervisor, improving efficiency and customer service. But leaders must lay the groundwork for this to happen. 

3. Remember the ‘frozen middle’

Nearly all respondents (91%) say managers and supervisors play an essential role in frontline workers’ success, yet half report that those managers aren’t equipped to support them today. The report refers to this as the “frozen middle.”

“These are people who have been successful with certain behaviors in the past. Now we’re asking them to try different behaviors,” a senior strategist at one investment firm says in the report. “Habits are hard to change.”

Some business leaders run a “train the trainer” program, where managers who have been introduced to analytics coach those who haven’t. Verizon equips its field managers with a social platform where they can ask questions of their peers.

Activating this frozen middle is essential, because ultimately it is not the senior leadership that will manage day to day decisions. Middle managers and supervisors must have bought into the effort and be ready to support the data-equipped workers downstream. 

Organizations are investing heavily to reorient themselves around data, but the expected gains in productivity, efficiency and customer satisfaction won’t happen if the company isn’t properly prepared. Leaders who oversee these programs must ensure the right training, attitudes and decision frameworks are in place for data use to flourish.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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