Data-driven decision making is a modern management concept based on a long history of data being used to make business decisions.
Most major business decisions, like where to open a new facility, are based on data. In the past, that data might have been simply the owner of the business observing where potential workers lived, or where major customers were located, then building near them.
Today, business stakeholders making the same decision have potentially hundreds of data points to consider, creating the need to better manage the process that we now call data-driven decision making.
Whether you are making a decision by yourself or with a team, here are some ideas for better leveraging data in your decision-making process.
- Be clear about the decision you need to make. If you don’t have the question or need clearly defined, the data sources needed won’t be as clear and neither will the final decision.
- Identify data that can help with the decision. At this stage, list any information that might help. Filtering too early can cause you to have to backtrack for missing data.
- Prioritize the data. Using the decision to be made as the filter, decide which data/information is the most relevant to the decision to be made and order them by importance. For a new manufacturing facility, for example, the utility rates may be more important than lease rate, but possibly not as important as the percentage of skilled workers in the surrounding area.
- Assess the data in order of importance and determine if a decision can be made with confidence with the available data. If your “gut” has to help determine the decision, ask if additional data can help clarify things instead. This is not the same as backtracking, but instead is a matter of using additional data to reduce the amount of emotion in making a business decision, which is especially important when making decisions as a team.
Developing an intentional data-driven decision process will not make your business immune from mistakes. However, if you know what data you used to make a decision that did not work out you have a better chance of identifying why and avoid the same mistake in the future.
Many businesses are drowning in data. Triple Helix helps companies organize their data with a focus on improving business decision-making. If done well, your organization will operate better than ever, and your bottom line will reflect the improvement. Contact us if you would like to learn more about our process for improving the use of data in any organization.