What Is A Data-Driven Culture? (And How To Develop One)

By Indeed Editorial Team

Published 27 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

For organisations to develop and grow over time, it is important they develop a culture that makes their functioning and progress possible. Organisations today keep data as a driving factor and create their conditions and environment around it. If you are planning a career in management or human resources, you can benefit from learning how this culture enables businesses to achieve their objectives through data-driven decisions and contributes to positive outcomes. In this article, we discuss what a data-driven culture is, describe how to develop this culture and highlight a few examples to showcase data-driven practices in such a culture.

What Is A Data-Driven Culture?

A data-driven culture is a collective environment that encourages the use of data to drive operations, business practices and decisions in an organisation. The primary aim of this culture is to utilise data to enhance the organisation's potential in various areas. It builds a professional and cultural framework around the hard facts, analytics and qualitative data that people use at various levels within the organisation. Typically, empirical evidence and data rather than speculation drive insights in such an environment.

Related: What Is Organisational Culture?

How To Develop A Data-Driven Culture?

Here are some steps you can take to develop a workplace culture driven by data:

1. Establish the data

To build this culture, it is important to define the data the company may use. This data may be the foundational input for many of the company's activities. The organisation's decision-makers may specify the metrics, data resources, data users, channels of distribution and other data points. Establishing the right data framework is important to building this culture.

Related: What Is Corporate Culture? (Definition And Different Types)

2. Collect the data

To promote a culture driven by data, an organisation may build and develop its data-collecting capabilities. Ideally, the organisation may see data as a resource and an asset that requires proper mechanisms for organising and updating it. The business may do this through technological systems, software tools, IT solutions and proper administration. The data organising processes may contribute to the company's analytics, empirical evidence and other vital information that may drive decisions.

3. Promote leadership

For a culture driven by data to grow and become an organisational norm, it requires proper leadership and the right actions. Typically, the culture emerges from the top levels of the organisation and develops accordingly in the subsequent levels. A company may have executives and managers who can lead through example and keep data at the centre of their decisions and directives.

Related: How To Demonstrate Leadership Skills At Work: A Guide

4. Improve perception

For a strong culture driven by data, the perception of data may change, and the collective mindset of the organisation may shift positively to adopt data-driven work practices. Individuals within the organisation may approach data differently and see it as an asset for the organisation and a tool from which to derive insights. Leaders within the business can improve this perception of data by demonstrating positive outcomes from data-driven decisions and encouraging data-driven practices.

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5. Promote data literacy

An organisation needs adequate levels of data literacy for this culture to develop over time and thrive. The organisation may equip and support its individuals to read, analyse, work with and effectively communicate data. Data literacy may build critical abilities, interpretation and application skills, all of which can help to standardise key data-driven practices.

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6. Provide accessibility

Data can only serve as a resource and help an organisation when there is easy and secure access to it. Accessibility of data is necessary to build a vibrant culture driven by data, and it can help to promote a positive, collaborative environment. An organisation can improve data accessibility by using secure servers that disseminate information through tenant and logical systems. It can also take steps to break down data silos that affect inter-departmental work.

7. Share data

A culture driven by data requires the active exchange and sharing of information between individuals and departments to drive data-centric actions. An organisation may do this by formulating a data-sharing strategy and having platforms for information that individuals can interact with. Cloud software, instant-messaging applications, peer-to-peer file transfer tools and offline data repositories are novel means that can encourage and improve the internal sharing of data.

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8. Validate data

An organisation also requires internal mechanisms that can guarantee the integrity of data. Regular analysis of information and having a system of checks and balances around data can help to validate, confirm and maintain its integrity. A company can maintain a team or hire data scientists, who can ensure the legitimacy of the vast amount of data it captures. Data can be prone to errors, and active monitoring and verification are important for a culture driven by data to thrive.

9. Ensure security

For the culture to thrive, an organisation can ensure the security of its data. It may use basic cybersecurity measures such as conducting security audits, tracking company devices, using encryption and installing anti-malware tools. The organisation can also raise awareness and educate its employees about phishing scams and have remote-work policies in place.

Examples Of Practices In A Culture Driven By Data

Having a culture driven by data can improve an organisation's capacity to better its processes and formulate solid strategies around insightful data. Given below are some instances of how organisations adopt certain practices in this culture:

Consumer business

A culture driven by data can be beneficial in a consumer business that uses a large amount of customer data. This data may provide valuable insights for the top management to make key decisions relating to sales and operations. The following is an example in the case of business expansion:

The CEO of a company that makes apparel is looking into major metropolitan and Tier 2 cities into which it can expand. The CEO conducts a meeting with the creative heads and operation managers and asks them to bring key data points to the discussion to formulate expansion strategies. As studies found that sales may play a large role in consolidating the business, the CEO directs the sales managers to hand over the existing sales metrics and provide additional key performance indicators such as customer average purchase value, lead-to-sale percentage and customer acquisition costs of the target cities.

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A culture driven by data can improve collaboration between various departments and teams as it enhances data-sharing capacities. Data repositories within the organisation enable the work processes to be transparent and fluid. The following is an example of how data-driven practices can improve collaborative efforts:

A casing manufacturer observes bottlenecks in the production line that are affecting its output levels. The manufacturer sets up a cloud-based platform where real-time data from the procurement team immediately reflects on a common data repository with the design team. The production manager then oversees this information and can assign tasks and deadlines to individual team leaders through interactive dashboards. Through this, the manager can also authorise access to secure information and provide necessary data inputs on the tasks required.

Policy formulation

Organisations with a vibrant culture driven by data may utilise data as an asset and a tool from which to derive insights from and hold it as the prime foundation for decisions. These organisations drive the plans and solutions they implement through a thorough analysis of quantifiable and valid information. Given below is an example that showcases how data culture can help an organisation formulate its policies:

A non-profit entity intends to serve the community better after finding substantial success in its field. The decision-makers of the organisation decide to team up with a state-run bank and launch a provisioning scheme for individuals in the informal sector. The top management decides to examine the data related to past hiring methods and the target employee sector to update the organisation's policies to accommodate the incoming workforce. The data indicates that the current workplace safety policy and employee code of conduct policy need reformation. The non-profit entity makes the data-driven decision and takes the necessary actions.

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