Why should an enterprise care about data culture? Because the lack of a robust data culture can derail your entire data strategy. A recent survey by BARC, a leading European analyst firm, found that the biggest barrier to your organization becoming data driven is the adoption of data culture in the day to day operations of the organization.
People are convinced of data’s value but they struggle to use it effectively. The BARC Data Culture Survey 22 shows that while there is an overwhelming consensus on the value of data. there is an equally large gap in putting it into action. 81 percent of respondents consider data to be an asset and 50% report data has improved decision making.
However, while 76% said their company was striving for a data culture, 41% said lack of knowledge about data & analytics was the biggest barrier to adoption. This growing data culture gap, caused by the intangible mindsets, behaviors, and processes your organization has in place, can seem, as the report says, like a “brick wall” threatening your data strategy. But there is a way to improve your data culture. You just need to start with your people, not just your data.
What is Data Culture?
Data culture is an organization’s reliance on data-driven decision making as opposed to consensus or hierarchical decision making. Those with a good data culture can answer questions more quickly, make better decisions, and move with confidence and intent. Since teams base their decisions on good and appropriate data, they avoid relying on gut reactions or misguided opinions.
Scaling this data-driven mindset across your company is key to success. “We see data culture as part of the corporate culture,” write Nina Lorenz and Carsten Bange in the report introduction. “[Data culture] refers to all the values, norms and attitudes in an organization that are the basis for actions and decisions related to the handling of data and analytics.”
This is why expanding data culture across the enterprise is a core focus for Travelers Insurance. “Travelers is looking to broaden its data culture beyond technical specialists to extend across the enterprise,” says Mano Mannoochahr, senior vice president and Chief Data and Analytics Officer for Travelers. ”
In other words, you want to build a thriving data culture within your organization. And the effort is worth it. This is why BARC argues it’s so important, stating that “data-driven culture essentially is part of modern corporate culture in the 21st century.”
Our own Alation State of Data Culture Report found that nearly every organization (86%) with a top-tier data culture met or exceeded revenue targets. That share fell to just 36% for organizations that have a low-tier data culture.
But where do you begin?
Data Culture Insights from BARC
BARC’s survey of over 400 companies across many industries shows that organizations are increasingly working to improve their data culture. In fact, data is influencing decision making almost twice as much today as it did 7 years ago. Compared with a past survey from 2014, the new results show that the share of companies basing half or more of decisions on data (instead of gut feel) nearly doubled from 42% to 81%. But how?
The more successful data culture organizations have two things in common: widespread data usage and defined data leadership. In many organizations, finance and accounting are traditionally the most data-centric departments. The BARC Data Culture Survey confirmed this: even 55% of laggards named these departments as the most data driven.
But adoption by the rest of the organization shows a dramatic gap. Departments like R&D, purchasing, and logistics are very data driven in the leaders but not even cracking 20% in laggards.
Similarly, successful firms have another thing in common: they have a dedicated team, like a chief data officer, and executive leadership (like a CEO and CIO) responsible for data culture. Those that have “no dedicated responsibility” or “fragmented responsibility” lag behind. This shows that the value of data-driven decision making is widely promoted and understood while a prominent data evangelist and/or team works to build the data culture.
BARC’s findings further prove the connection between a data culture and positive business results. In the survey, the top expected and realized benefits of a data culture include:
- Improved decision making,
- Process improvements,
- Cost reductions,
- Revenue growth,
- Competitive advantage,
- …and more
Another people-focused benefit is a greater acceptance of decisions, implying that you can’t argue with the data.
However, gaps exist between the expected and realized benefits of a data culture for even the most successful organizations. For instance, only 26% report having achieved building a competitive advantage through data, compared to the 55% of companies that expect this benefit. Similarly revenue growth and development of new business models lag. What’s standing in the way of firms actually using data to grow and change their business?
Crossing the Data Culture Gap
According to the BARC report, “data access and data governance lay the groundwork for data culture.” Data has to be well organized and trusted; access to data has to be easy and universal. The goal is to create “universally understandable, accurate, complete, trustworthy, secure and locatable corporate data.” This supports data democratization, so workers get the data they need alongside guidance on how to use it appropriately.
The report validates this focus. Over two-thirds of the respondents say data access and governance initiatives are “relevant and being worked on” or “relevant and being planned”.
But that isn’t enough. In the report, the BARC team lays out a data culture framework that covers all aspects of people, process, and technology. Data literacy, governance, and access can be facilitated through process and technology.
For your people, however, organizations need leadership, a strategy, and communication. These are the areas that lag in the report, with only 21% of firms saying that communication and literacy initiatives were “relevant and being worked on” and only 16% reporting that leadership initiatives were “relevant and being worked on”.
Start With People to Deliver Data Culture
According to the report, “Literacy and communication are the measures that give life to a data culture.” And this is where the most work must be done. The top two areas holding back data culture are lack of knowledge and internal communication among employees about data & analytics.
How do we address these gaps?
For data culture to be successful, people need community, collaboration, feedback, metrics, and more. BARC highlights these areas as critical for data culture, stating that “the softer more difficult structures will enable the ultimate transformation to the fully data-driven business.”
This is critical for data culture adoption. Organizations need tools that learn from and support human behaviour. This includes not just access to data and data governance to make sure you can use it, but a social platform that captures tribal knowledge around data to help people better understand it and how to utilize it, connecting them to experts when they have questions. They also need an easy way to search for and discover data.
Once they find the data, people need to understand how to best use it. This falls under data literacy, or the ability to analyze, draw conclusions from, and persuade others with data. It can be made easier with a people-centered platform.
Such a platform can bridge the gap and deliver data culture. “Data is the lifeblood of our organization,” says Paul Liberman, president of global technology & product at DraftKings “We use Alation to better understand our data, improve onboarding of new employees, and empower our teams with critical insights to build better products and features for our customers.”
Data culture is clearly important. But the BARC Data Culture Survey reveals that without focusing on the people side of the equation, firms may face continued challenges. “Many are recognizing that mental and technical silos paired with internal power plays are the death zone for data culture initiatives.” says Dr. Carsten Bange and Nina Lorenz in their conclusion. To avoid this fate, focus on the ‘soft side’ of data culture, communication, literacy and leadership and using tools and embrace this new way of working with data.
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