Data as a driver for digital leadership

How to lead out of the data jungle into an information-centric organization?

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In our VUCA world[1] adaptability and decision-making power are critical success factors. How data is used, and information gained distinguishes digital masters from digital beginners. In order to fully exploit the potential of an organization and build a data-driven organization, leaders need strategic vision as well as digital knowledge and skills.

Data-driven organization as a competitive advantage

The desire for stability is particularly evident in volatile and fast-moving environments. Information provides security. We believe that building a strategic information advantage will be one of the core tasks for any competitive organization in the future. The data-driven organization enables the automation of processes and the use of artificial intelligence, open data platforms, and information ecosystems. In this way, new products, services and market segments can be developed, customer experience and satisfaction improved, and the efficiency of operations increased.

Now it is time to create a data-driven organization through comprehensive information management supported by digital technologies. The decision to do so is easy, because if you don’t start now, research by Harvard Business Review shows you will not be able to catch up with competition in 3–5 years.

Culture as a driver

By processing information and data, modern technologies enable the change from intuitive decision making to knowledge-based decisions. But it is the culture in companies that makes all the difference and enables the transition to a data-oriented organization. Change can only be achieved through new ways of thinking, organizational models, and leadership structures.

Leaders must create not only the technological but also the cultural framework conditions to successfully establish a data-driven organization to meet the demands of the new information age. In order to develop and establish a true data-driven culture, the role of the “data advocate” of managers is needed.

What does a data advocate do?

As a data advocate, leaders actively use the value of information to develop new business opportunities and product innovations for customers. Collaborative working methods and networks facilitate the collection and use of data. Analytical knowledge and skills are required to evaluate and understand the information. A consistent data strategy contributes to the strategic business goals.

But in our view, what makes a data advocate at its core is the ability to transform data into actionable insights with business benefits, instead of being guided by intuition and instinct as in the past.

Characteristics of a data advocate

A data advocate recognizes the high value data will have in the future. Data-based decision-making requires an objective and arguable view of situations and challenges, as well as the ability to understand, trust and share data. He/she knows how to use technical tools and analytical methods. Skills such as critical thinking, analytical curiosity and knowledge in relevant areas such as data visualization are essential. A data advocate promotes data security and compliance in his/her department and ensures that data collection and analysis is conducted ethically. He/she draws on the expertise of other data experts. After all, leaders are required to build a learning organization. It is up to leaders to build a culture in which employees themselves have access to the data and can use technical tools – in this way, employees are given responsibility and the company continues to develop.

These core skills must be developed in a targeted manner. We see five success factors that will prepare the way for becoming a data advocate:

  • Create a culture of analysis starting with the empowerment of employees
  • Build awareness of the responsible handling of data
  • Take personal responsibility as a role model in compliance issues
  • Build data-centric structures
  • Remain curious and critical.

Even if these developments are rarely possible overnight, persistence pays off here. Our people analytics expert Dr. Caroline Baethge and our data management expert Dr. Katja Tiefenbacher will be happy to support you.

Thanks to co-author Kathrin Lehner.

[1] Definition VUCA = Acronym for the English terms volatility, uncertainty, complexity and ambiguity.

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