Whether it’s thrust upon us by external forces or internally conceived, change is a necessary part of growth and success for any organization. While there are many vital components to successfully implementing organizational change, the collection, monitoring, and reporting of data is necessary to making strategic decisions and ultimately assessing the impact of such change. As Peter Drucker, the man who invented management, once said: “What gets measured gets done.” However, the work of data monitoring and analysis should not be reserved for discrete moments of change, but rather to truly unleash the power of data it must become an integral part of an organization’s culture.
It starts at the top…
While data analysis can be as complex, establishing a data-driven culture within your organization doesn’t have to be. But it doesn’t happen overnight either. It starts with leadership treating data as a strategic asset and then building resources that put the asset to use for big decisions as well as for staff in their day-to-day tasks. And the use of data must permeate the entirety of the organization to be most effective. As research shows that limiting data use to specific parts of an organization for the creation of reports or strategic planning inhibits the potential for innovation and organizational growth.
…and permeates all levels of the organization.
By building a data-driven culture, the entire organization understands data’s importance and bases all decisions on actionable insights. This improves speed, efficiency, the ability to predict outcomes and adaptability during transformation.
It’s one thing to understand that data is important, but for many organizations the real trick is bridging the gap between having data and using it. Data literacy is the ability to read, work with, analyze, and argue with data regardless of your role, skill level, or the tools you use. Improving data literacy hones an individual’s decision-making skills as you learn to ask the right questions, interpret findings, and take informed action. The more people who are data-literate, the more impact your business will see: real business changes that lead to real business results.
Again, this isn’t an overnight effort it takes time and support from leadership. An organization can begin to build its culture and strengthen data literacy by setting organizational goals and tracking key performance indicators (KPIs) to assess progress towards those goals. As your organization becomes more sophisticated in utilizing data, goals and KPIs can be developed to support individual departments and programs in their efforts to drive achievement of the organization’s goals.
1. Set SMART Goals
Many organizations engage in strategic planning to set high level goals in furtherance of its mission and vision. To effectively track progress towards a goal, goals must be actionable and measurable. One framework that helps refine goals for maximum effectiveness is using SMART. SMART is an acronym that stands for Specific, Measurable, Assignable, Relevant, and Time-bound.
SMART goals are:
- Specific: Well defined, clear, and unambiguous
- Measurable: With specific criteria that measure your progress toward the accomplishment of the goal
- Achievable: Attainable and not impossible to achieve
- Relevant: Within reach, realistic, and relevant to your organization’s mission
- Timely: With a clearly defined timeline, including a starting date and a target date.
But SMART goal setting alone will not get the job done.
2. Identify Key Performance Indicators (KPIs)
Key Performance Indicators (KPIs) are the critical (key) indicators of progress toward a goal. KPIs provides a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.
For different types of organizations, different KPIs are required, but the goal is the same, making sure goals are being achieved. There are many types of KPIs. Some major types of KPIs are: high, low, leading, and lagging.
HIGH VS. LOW KPIS
KPIs that target an entire organization’s goals are called high KPIs. These indicators measure the company’s success as a whole. KPIs that target smaller projects, such as departmental strategies, are called low KPIs
Ultimately, low KPIs must contribute toward the high KPIs or the organization’s overall goals. Both are critical to helping a company achieve its objectives and identify ways to improve.
LAGGING VS. LEADING KPIS
Lagging KPIs measure the current state of a business and its achievements towards a goal after a set period. For example, measuring how much traffic a website earned, how many people attended an event or how much revenue a program earned are all lagging indicators.
Leading KPIs measure and determine a business’ future state. For example, businesses may use indicators such as job growth, interest in new markets or unemployment levels to predict various outcomes for their organization.
When you pair SMART goals with SMARTER KPIs, you have the direction and the tools to keep you on the path to success. Expanding the SMART framework acknowledges that your outcome or result (goals) are long term, but you may need to refine your KPIs in acknowledgment of situational changes to achieve organizational goals.
Evaluate: Regularly examining your KPIs will ensure you’re still working towards the right objectives. During your evaluation you might ask questions like, Is my KPI still relevant? What are the main blockers to success? Do I have the right budget, tools, talent and support? After this KPI period is complete, what should be measured next?
Reevaluate/Readjust: Consider reevaluating your KPIs at specific periods—perhaps halfway through your KPI timeframe and once again at the end. Take this time to determine whether it’s necessary to make changes to your KPIs so they’re up to date, achievable, relevant and in line with company objectives.
3. Build a Dashboard and Monitor Data
The next step is to embed data into simple tools for management. The keyword here being simple. A KPI dashboard brings all your KPIs together in one place for easy comparisons and analysis. You can see how you’re performing on each different measurement, side by side.
Ideally this dashboard is built to pull from real-time, data and is interactive to allow users to drill down into the detailed data. If your organization has this capability be sure to leverage it. If like Atrómitos you are just not there yet do the next best thing and use a spreadsheet and create graphs that can reviewed regularly.
However sophisticated your dashboard, it is essential that leadership are regularly monitoring your organization’s KPIs in one place. Because no metric operates in isolation. Your KPIs overlap and influence each other. Displaying them alongside each other helps you see instantly which goals are being met, and which are being sacrificed at the expense of other priorities.
4. Disseminate, Collaborate, and Adapt
Data-driven companies believe shared data should be made available to all employees. This lends itself to improved situational awareness and performance at the individual and team level. When everyone has access to the same dashboards to measure progress on common KPIs, your teamwork — and rate of advances — can be accelerated.
But don’t stop there, engage your teams in a regular review of the dashboard. Such efforts can make teamwork more effective and improve collaborations. According to Boeing CIO, Ted Colbert, when you democratize the data—”people begin to believe in the data, it’s a game changer: They begin to change their behaviors, based on a new understanding of all the richness trapped beneath the surface of our systems and processes.”
Front line staff who are most closely impacting the day-to-day operations of your organization may have important insights to share. Getting their evaluation and input may lead in adjustments that result in achievement of your organization’s goals.
Adopting a data culture will ensure that decisions being made at all levels of your organization are informed by actual performance that is relevant to your organization’s vision and mission. While establishing a data-driven culture will require investments by leadership and staff, the benefits of such efforts bring considerable value that will improve your organization’s ability to compete in the marketplace and achieve its goals.