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The past 18 months sa a seismic shift in the way we work and communicate with our colleagues. From instant messaging to video conferencing, technology has enabled business leaders and employees to be more connected than ever before. However, while we are communicating more, we may not be communicating as effectively if we don’t have the data insights to inform our conversations.
The ability to make data-driven decisions depends on data literacy, access to information and software tools available. Without these key factors, there is a question mark over the quality of business conversations and just how enlightened decision-making at the top really is.
According to recent research commissioned by Tableau, almost 90% of C-suite executives think that a quality business conversation should have clear objectives, be honest and transparent, and lead to an outcome. A further 81% also felt that the availability of hard data is essential for an effective business conversation.
Over half said the ability to understand insights from data is as important as knowledge of the industry (54%). This fact is unsurprising after a recent UK government report revealed that 48% of businesses are recruiting for data-related roles.
The pandemic has transformed the way we talk business. On the relational side, 64% of executives believe that opportunities for informal conversations, i.e. “water cooler” moments, have been significantly impacted. This has undoubtedly affected the development of positive rapport and trust within teams.
On a more technical note, Tableau’s research, conducted by YouGov, found that half of senior executives feel the pandemic has revealed information gaps between teams. A lack of information or data on a topic and frustration around long meetings that do not result in a solution are further challenges.
These gaps are widening due to both the physical divide people have experienced since the start of the pandemic, and the information divide caused by fragmented technology systems, resulting in siloed data across an organisation. It is through access to real, unbiased and complete data sets that business leaders can have better conversations and make better decisions.
Putting data at the heart of business culture
Data is key to dealing with the facts and building trust. Over 75% of business leaders surveyed by YouGov agreed that data is important because it reduces uncertainty and promotes accuracy.
Business conversations without empirical data are at risk of being swayed by information that supports a specific argument. This is called confirmation bias, and while data insights might still be used selectively in conversation, if everyone has access to the same data it is much harder to bend the truth.
While executives see the value of data in business conversations, very few have well-established data cultures in place, with only 19% claiming that everyone across their business uses data in decision-making. Additionally, one in 10 believed data analytics were not used at all in their company.
Read more about data for business decision making
- Explainable BI: eliminating the black box of human decision-making.
- A report from ThoughtSpot and the Harvard Business Review finds that organisations empowering front-line employees to make analytic decisions poised to outperform their competitors.
- Lean analytics to change business decision making.
This gap and the failure to address it is a combination of a general lack of data literacy, ability to generate data insights and trust in data, according to a third of leaders (34%).
The nation’s increasing data skills gap has been reflected in other research, with the government identifying that almost half of UK businesses struggle to recruit people with data skills.
It is a challenge that both the government and private sector need to tackle. Tableau, for example, has just announced a commitment to enable 10 million data learners over the next five years.
An extra barrier for a third of respondents was that there was “too much” data. This may indicate that businesses simply don’t have the digital skills or tools to use data analysis and effective visualisation for insights. This, combined with the lack of information sharing, presents a real issue. How are leaders supposed to be able to make decisions without the data tools or skills to deliver a full and accurate business picture? Without these, organisations are missing a shared vision, trust and mutual alignment from stakeholders that will drive their success.
Preparing for the future
Human decision-making is ultimately reason-based. Regardless of the decision being made, humans look for strict reasons to justify their choice. At least some of these should be based on data and weighted appropriately according to importance, to keep business conversations focused.
However, this should not be at the expense of environmental, social and governance values, and the well-being of all stakeholders – particularly marginalised groups. Data can go a long way in helping businesses to grow, innovate and compete, but we must never lose sight of human values.
The Tableau research shows that business leaders know what they need to do, but they are not yet doing it. Investing in tools and training for employees is an important step, but their bosses need to lead by example.
If companies are to succeed in this information-hungry world, a true data culture needs to start from the top.
Ivo Vlaev is a professor of behavioural science at Warwick Business School. He was formerly a research fellow at University College London and a senior lecturer in behavioural sciences at Imperial College London.