One accurate measurement is worth a thousand expert opinions. —Grace Hopper
Building a data-informed culture is not easy, as it often requires a period of short-term stress, and may briefly reduce your productivity. You will need time to adjust to the new ways of working that this kind of culture demands. However, the results, and the improvements that you will get if you commit are well worth the effort.
The first step in building a more data-informed organization is making the case to your boss.
You have to convince whoever's in charge that being data-informed is an asset and this is a shift worth making. To do that, you want to communicate clearly about what advantages being data-informed brings and be ready to manage objections.
[clickToTweet tweet="How to Talk To Your CEO About Building A Data-Informed Culture" quote="How to Talk To Your CEO About Building A Data-Informed Culture"]
Put the business value first
A data-informed culture brings with it a wealth of advantages across all corners of the business. When talking to your CEO about building a data-informed company, however, you want to:
- think (and speak) in terms of value to the business first
- communicate clearly and precisely
- have your logical supporting ideas worked out in advance
“Executives are busy people. They are perpetually short on time, are used to processing lots of information quickly, and get impatient when they feel like someone isn’t getting to the point,” says former McKinsey consultant Ameet Ranadive.
At McKinsey, communicating concisely and effectively is what pays the bills. They think about argumentation in terms of a pyramid structure. The “Big Idea” comes first (and goes at the top). The ideas that support that Big Idea come after that, or underneath, conceptually.
(Source: “The Pyramid Principle”)
If your boss asks whether you think your company should become a distributed team and you wanted to structure your argument in accordance with the Pyramid Principle, you might do it like this:
“We should become a distributed team” ← the Big Idea
- “allowing employees to work wherever they want will improve retention,”
- “allowing employees to work where they're most productive will improve output, and”
- “not needing a large office will reduce our fixed costs.”
“In some cases,” Ameet says, “the executive may already mentally be at the conclusion you want them to reach, in which case she will accept your recommendation and move on (without you having to go into the detailed supporting arguments).”
Sometimes, however, you will have to go into supporting arguments.
When it comes to building a data-informed culture, here are the kinds of arguments you'll want up your sleeve when it comes time to back up your assertion.
1. A data-informed culture means we'll understand our customers better
When you have a data-informed culture, everyone in your organization is able to access metrics relating to:
Most businesses are already collecting this kind of data, or at least realize its importance. But not all businesses are collecting the inputs to them. You have to do more than track top line metrics—you need to analyze the factors that actually impact your app's retention, or churn, or overall growth.
These are your raw clickstreams, transactions, in-app events, sensors, call records—all of the minute pieces of data that make up your users' behavior.
When you can break these phenomena down into more concrete, actionable metrics, then you give your organization's decision-makers the foundation they need to make smart decisions.
“Product managers [can] evaluate their work much easier and create incentives for their teams to make great decisions,” as Teambition's Zhuoqun Qian says, “Also, people directly manage their teams’ contributions and more scientifically adjust strategies to improve efficiency in crucial parts of the business.”
2. A data-informed culture means we'll make better decisions
When you're a small company, it's easy to be data-informed. You're all sitting around the same table in the same apartment (or typing in the same Slack channel). You don't have to ask someone or “find out” how many daily active users you had last month compared to the month before—those numbers are burned into your brain right alongside your run rate, your revenue, and your rent.
As you grow, however, it gets harder and harder to make your company's data accessible.
There's so much data that all requests have to go through your new data science team, which makes it hard for others to make quantitative decisions.
You wind up waiting days for data on last month's daily active users, and pretty soon, you're not even bothering to ask for the numbers. You start defaulting to the HiPPO (Highest Paid Person’s Opinion), bias invades every corner of the business, and cognitive fallacies drive every decision.
When you're data-informed, everyone has access to a shared base of core knowledge. A summer intern can disagree with your CTO, and if they have the data to back up what they're saying, they can win the argument. That's only possible with data everyone agrees on and can access.
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3. A data-informed culture means we can scale more effectively
Any growing organization that makes decisions based on data has to reckon with the problem of knowledge transferral.
Since you can't really make decisions entirely with data, intuition still plays a role even in the most data-informed organizations. Moreover, it's an important role. Teams should operate with shared frameworks defining who their users are, how they behave, and what they need. These frameworks can be highly powerful motivational devices—think Facebook's “7 friends in 10 days”—but they need to be maintained.
New people who join your team are going to bring their own ways of doing things and their own approaches to user data. If the way your people interpret data is important, then you need a way of making sure it's part of your culture and is passed down from employee to employee.
Part of it is managerial. A strong emphasis on being data-informed at the top of the chain is crucial to encouraging data-informed decision-making. However, you also need technology to enable that decision-making, because otherwise, your team won't be able to fulfill that vision.
At Facebook, Interana co-founder Lior Abraham built the game-changing internal analytics tech Scuba to do just that. The goal of Interana, like the goal of Scuba, is bringing accessibility to data—eliminating “long hallway discussions” and making it “easier for people to get things done.”
“It was common for managers, PMs, and even people in completely non-technical business roles to use Scuba,” said one ex-Facebooker, and that's something we've worked hard to make possible with Interana as well.
[clickToTweet tweet="If the way your team interprets data is important, you make sure it's part of your culture." quote="If the way your team interprets data is important, you make sure it's part of your culture."]
Gaining a better understanding of your customers, making better decisions inside your company, and scaling more effectively are all great reasons to build a data-informed culture.
As in any act of persuasion, however, you'll want to be aware of the common objections that might come up and know how to respond:
- Gut intuition is what builds great businesses: Being data-informed and using your intuition aren't mutually exclusive. Data and intuition actually go hand-in-hand. Even as Uber's Andrew Chen extols the benefits of being data-informed, for instance, he says “have a vision for what you are trying to do.” That vision can come mostly from your gut—the data's just there to help you get there.
- People won't “get” it: It's easy to forget just how capable people are when it comes to understanding data. With one of our customers, the number of people running ad hoc queries on data increased from 3 to 200 over the course of six months. This wasn't just engineers—it included non-technical folks as well.
- People won't use the tools: There's often a period of adjustment as teams learn to get in the habit of using the tools that come along with a data-informed culture. Every member of the team can help get through that period, however. Something as simple as insisting upon seeing data when a decision has to be made can set a powerful example. Incentives are another powerful tool—never forget that when you begin to measure a metric, you incentivize the behavior that leads to it, for better or for worse.
We hope you've found this a useful guide for thinking about communicating the importance of a data-informed culture to your CEO.
Do you have advice about how to explain the business value of being data-informed? Stories from your personal experience? Share them in the comments below, and you might be featured in an upcoming Interana article!