Using data to drive business decision making seems obvious. Still, we often underestimate how often past practice, personal gut instincts, or other non-scientific factors influence our decisions. While not every decision can be made based on numbers alone, leaders need to recognize the power and impact data has on how quickly and effectively they achieve their goals. Once you’ve collected and analyzed your business data, it’s time to think about what to do with it to make it work for your organization.

What is Data-Driven Decision Making?

Recently, one of our clients came to us with a common problem faced by leaders: they had a clear strategic plan but didn’t know how to implement it. Strategic plans are valuable tools for establishing overarching goals and pursuing the organization’s mission. However, they lack the actionable steps to achieve those goals. Business intelligence can help. This client had a nine-month backlog despite their best efforts. Working with them, we analyzed workloads, business processes, work volume, and other data. We identified places where they could divert resources to complete the backlog with a minimal impact on the rest of their work. Using our plan, they cleared the backlog in a matter of weeks and maintained processing times of less than one day.

Harvard Business School defines data-driven decision-making (sometimes abbreviated as DDDM) as “the process of using data to inform your decision-making process and validate a course of action before committing to it.” In essence, it provides the concrete steps to take to achieve what you’ve outlined in your strategic plan. DDDM uses the business intelligence you’ve gathered to make the best decision about the best course of action.

Business intelligence — collecting, analyzing, and reporting data to turn it into valuable information about the business — is like turning the lights on in a dark room. Through data, you get an objective view of the entire operation, exposing both strengths and weaknesses and identifying opportunities for improvement or growth. Without data, businesses work from educated guesses and may not make the best decisions to achieve their goals.

Incorporate Data into Your Decisions

Relying on data doesn’t mean eliminating the intuition and judgment of an experienced leadership team. Instead, those judgments become even more valuable when they are backed up by the right data and the right questions in service to the organization’s mission. As robust and complex as machine learning and artificial intelligence have become, they still cannot entirely replace the human touch. Experienced leaders are a vital part of the decision-making process, and business intelligence strengthens their efforts

Incorporating data-driven decision making looks different for every organization, but some key elements make it successful:

• Ensure all team members understand the mission and vision and how their contributions relate to the bigger picture
• Establish key performance indicators or metrics to measure success
• Invest in IT resources to promote data sharing and integration across departments or external agencies
• Frequently report and analyze data
• Focus on collecting the right data

Get Started Today

Data-driven decision making makes sense and can help escalate your business practices. Determining which data to incorporate and how it plays into the organization’s mission, vision, and strategy can be a daunting task. Not sure where to start? You’re not alone.

Momentum can help you get to where you’re going based on sound data, proven processes, and implementation support. Get in touch to learn more about how our experienced business consultants can help you.