Business leaders are recognising the benefits of having a data-driven mindset. It leads to real, strategic shifts for their companies. It allows them to think more long term and help them achieve beyond their expectations.
From improving the quality of leads coming through their websites, to increasing customer lifetime value, there is a lot to gain for companies when their leaders have a data-driven mindset. Beyond the financial outcomes, having a shared data-driven mindset across a team or entire business improves collaboration and motivation. It makes for a better work environment all-round.
After over a decade of experience in helping companies with their data-driven journeys, I’ve realised organisations that are ready to embrace the data-driven mindset are more likely to succeed. In my work, I support businesses by integrating Google Analytics Governance into their workflow and empowering their teams to find valuable insights.
In this post, I’ll share some data-driven mindset principles I’ve learned along the way, plus tips on how you can implement them in practice. Are you trying to become more data-driven or are you on a crusade to instil the principles within your business? If you’re on the lookout for some practical tips, this post will help.
What is a data-driven mindset?
A data-driven mindset is when an individual or a team/company makes decisions based on data analysis instead of emotion and intuition. Having a data-driven mindset means you’re not simply trusting your gut and hoping for the best.
Leaders with a data-driven mindset ask themselves why things are the way they are. They possess a healthy scepticism and are not afraid to be proven wrong or fail.
Why is having a data-driven mindset important?
Having a data-driven mindset leads to real business outcomes. Beyond what I already mentioned, here are some more results you can expect:
- Confident decision-making. Instead of relying on intuition, decisions are based on data. Reaching a conclusion on business challenges will become easier, whether it’s selecting the most profitable acquisition channel to invest in or adjusting your marketing message.
- More innovation. Having a data-driven mindset encourages crucial components of innovation like collaboration, thinking, and failing. Moreover, it aims to break down silos within an organisation, allowing different departments to understand each other’s challenges and opportunities.
- Improved efficiency. Having a data mindset allows you to systematically analyse and improve your current business processes. This in turn provides an opportunity to reduce unnecessary expenses and to improve efficiency.
Weekly Web Analytics Strategies for Product and Marketing Managers
The four steps to developing a data-driven mindset
Having a data-driven mindset, especially when it is championed by leadership teams, can be transformative for a business. It’s the first stage when it comes to building a collaborative and innovative culture in an organisation.
Let’s look at the four actionable steps you can take to develop this mindset.
Step 1: Apply healthy scepticism to decision making
Having a data-driven mindset is all about asking questions and answering those questions based on data. Avoid using opinions or intuition for decisions. Instead, use the data that you have available to make the most informed decision you can.
If you have a data-driven mindset, you often don’t assume whatever you’re told is true. Instead, they question things to discover the truth.
Making decisions based on available data is a good start, but it can come with challenges. One issue that comes with wanting to be data-driven but not getting it exactly right is when you focus on the wrong metrics.
This has been a recurring theme when it comes to the companies I advise. Often, the metrics they track are not aligned with their business goals. Sometimes they are used just to impress shareholders rather than to learn from. This can have negative long-term implications.
How do you overcome this? Identify the key success metrics for your business that are actually important and not just vanity metrics. Then, avoid short-term tactics in favour of a long term sustainable strategy and communicate these new metrics with your team and with your business.
Step 2: Make room for thinking and collaborating
The next step is to make time in your schedule for thinking and collaborating. A great time to do this is when you’ve just completed a marketing campaign or a new development. Organise a ‘post-mortem’ session with your team to find out how it went and how you can do even better next time.
Go through your data and dive into insights with your team, as well as other departments in your organisation. Invite questions and counterarguments in these sessions. And remember to praise all ideas, not just good ones.
If you’re in marketing, then you might want to ask sales about their struggles during the campaign. Could extra marketing communication help? Could they be scaled and automated?
The more opinions and collaboration in these sessions the better. With a data-driven mindset, you’ll question ideas and determine whether they are worth following up on and ultimately find areas of the organisation to improve on.
Step 3: Embrace failure
As British author and speaker Ken Robinson said, “If you’re not prepared to be wrong, you’ll never come up with anything original.” And if you can’t come up with anything original then you’ll never be able to innovate or thrive in the marketplace in the long run.
Embracing failure can seem uncomfortable to start with. This is especially when you’re trying to get new people on board the data-driven mindset. But this is one of the backbones of this way of thinking. When you can do it, it gives you and your team the freedom to experiment with new ideas they may not have been open to before.
Make sure you are welcoming of what the data is telling you. It’s easy to dismiss negative patterns – but showcasing all stories, good and bad, will ultimately lead to more learning.
Of course, success is important in business. But when you can prioritise learning over success all of the time, it will lead to success in the long run.
Step 4: Increase your team’s data-literacy
The final step goes beyond just the individual data-driven mindset and towards the mindset of your team. It’s to improve your team’s data literacy overall. But how do you go about doing this?
In 2020, a Harvard Business Review focus group study showcased that it wasn’t the technical skills that most teams were missing. Instead, the skills shortage came from data-driven problem-solving. For example, asking the right questions, understanding which data is relevant, and interpreting data to get meaningful insights.
At Business Ahead, we always start with developing a measurement strategy that will support business goals and aspirations. We identify the wider business objectives, along with the digital metrics that enable us to measure these. This creates the compass for what to track.
You can replicate this process in your own team when you’re trying to encourage them to be more data-driven.
Next, work toward making sure your data is reliable, connected, and accessible. Incorporate data visualisation, staff training, developing new processes and combining additional sources of data to gradually move the dial towards taking full advantage of being a data-driven organisation. The set of documents and tools that you can share with your team and partners forms your Google Analytics Governance.
Making your data accurate and complete may not happen overnight. It’s also more complex the more data sources you have or when you have multiple indicators of success you need to measure. However, these activities go beyond building the data-driven mindset and will help you build on each step of the process.
Wrap-up: take your first steps towards building a data-driven mindset
Having a data-driven mindset is your gateway towards making digital transformation work. For business leaders, it allows them to create the environment needed for organisations to become fully data-driven.
Having a data-driven mindset means you’re always looking for ways to learn and improve, whether that’s in yourself or in the organisation. Keep asking questions and look for ways to answer those questions with data.
If you’re looking to take practical steps towards better decision-making then my tip is to ensure your Google Analytics data is organised and meaningful. Creating a Google Analytics Governance Document is a great place to start. This helpful resource should include all your configuration details and it can also be used as an auditing tool. Once you or your implementation specialist has compiled all the information, it forms an analytics wiki for your team and partners to use and find profit-generating insights in your Google Analytics. That’s how your business can start to develop a data-driven mindset. If you’d like to implement a Google Analytics Governance Document but are not sure what to include in it, click the link below for guidance straight to your inbox every Tuesday morning.