How to embed data-driven decision-making into your organisational culture

How to embed data-driven decision making into your organisational culture

To create a willingness to use more data and unbiased decision-support algorithms, data-driven decision-making should be embedded in the organisational culture, writes Jeff Mike

Thanks to the increasing sophistication of analytics; data and algorithms can inform and improve management, business, and HR decision-making throughout companies. But, the tools of data collection and decision-support algorithms are only one element in the quest to attain the full potential of analytics.

Another is the ability of employees at all levels to use these tools, a challenge that will require a broad-based upskilling of the workforce. And, there’s an additional element – the willingness to employ analytics to make decisions. Compounding all of this is the fact that organisations today are becoming social enterprises, where the ability to manage social, environmental and governance concerns are as important as financial returns. In this environment, workers have more influence than ever. Their voices are amplified through social media and other means, meaning errors made by an organisation can have far-reaching consequences.

The role of organisational culture
So, what does all of this mean? To create a willingness to use more data and unbiased decision-support algorithms, a mindset of data-driven decision-making should be embedded in the organisational culture in a way that benefits employees in their work as well as other stakeholders. The need for a data-driven culture is important and shouldn’t be underestimated.

In fact, this need is one of the top findings in Bersin’s High-Impact People Analytics research, which revealed that a company can fully utilise people analytics only if – and when – using data to make decisions becomes part of the culture, or “how we do things around here.” In fact, the research determined that organisations that have achieved the highest levels of people analytics maturity are three times more likely to have such a culture than organisations at lower maturity levels.

“A data-driven culture won’t take hold if employees have to stop working to get the insights they need”

However, just making the decision to implement a mindset of data-driven decision-making into an organisation’s culture won’t work. In an analytics-friendly culture, data-driven decision-making isn’t an afterthought, an add-on, or a justification; rather, it is a shared mindset in which:

  • Everyone recognises that data and analytics are essential to sound decision-making;
  • They use data and analytics in their decision processes for all aspects of the enterprise including financial, social and environmental well-being;
  • They use data and analytics to monitor – and adjust – decision outcomes to ensure desired results and to prevent bias.

The final bullet point is a key element because it supports the kind of organisational innovation and agility that many companies are seeking to cultivate while managing important social concerns. Instead of a command-and-control approach in which marching orders come from above and everyone else moves in lockstep, the leaders of these companies want to make the strategic decisions and push the execution decisions. This involves continuous sensing throughout the organisation and its environment, along with adjustments to ever-changing conditions and outcomes.

Communicating and modelling the mindset
As with everything related to organisational culture, HR plays an essential role in creating a shared mindset of data-driven decision-making. The HR team, often with the help of a dedicated communications specialist, should craft strong and frequent messages about the importance of data and analytics, and then support those messages with incentives. HR also needs to enlist senior leaders to deliver the message – not just in words, but more importantly, in actions and in engaging the workforce.

Before these communications are pushed out, leaders should take care in sensing how their workforce feels about the initiative and what their expectations are, through open conversations, pulse surveys, and other listening channels. By having a clear understanding of where the employees stand on using data to make decisions, leaders can tailor not only their communications plan, but their overall strategy as well to have the best chance at adoption and satisfaction with the initiative.

“HR must be careful not to over-rotate on analytics – creating a culture in which analytics trumps human judgement”

Environment supports culture
Another of the key findings in Bersin’s High-Impact People Analytics research is that strong data-driven decision-making is enabled by the delivery of actionable and scalable information. In other words, the data and analytics tools that employees need must be at their fingertips. A data-driven culture won’t take hold if employees have to stop working to get the insights they need.

That means that analytics can’t be siloed in HR or elsewhere; they have to be embedded in the work across the enterprise. It also means that the data needed to fuel analytics must be understandable to employees. In addition, the more mature a people analytics capability, the more sources of data are tapped. The data mix must include qualitative data as well as quantitative data. This approach enables workers to consider a number of perspectives and to make the best decision for the company, its stakeholders and its environment, as part of regular workflows.

A final nuance
While Bersin research reveals that a mindset of data-driven decision-making is a key ingredient in overall analytics maturity, our in-depth interviews with people analytics practitioners and thought leaders surfaced a significant finding: analytics are not a replacement for human judgement; they augment human judgement.

One of the world’s largest e-commerce sites also provides a notable example of this finding. Recently, it scrapped a talent acquisition analytics project that its engineers had been working on since 2014. The company had hoped that the program would rank job applicants – producing a shortlist of the top candidates for any particular job without the need for HR professionals. The only problem? The program showed a bias toward male applicants and the engineers couldn’t eliminate it.

Accordingly, HR must be careful not to over-rotate on analytics – creating a culture in which analytics trumps human judgement. Machines don’t think in the human sense, and a company is a social enterprise. Thus, the role of human judgement and experience cannot be completely replaced. It must be woven into a data-driven culture.

The promise of analytics is one that every company should embrace. To make the promise a reality, however, HR must work to ensure that a culture of data-driven decision-making permeates the organisation and encourages the aspects of the new social enterprise. Without that, returns on investments in analytics will be limited.