Why is data so important for leaders in the 21st Century?
1 February 2019
At the turn of the 21st Century, companies never anticipated how much easier everything was going to be with big data.
For business leaders especially, the use of data has become the accomplice to success. With nearly every service delivery practice informed by research insights, the process of trial and error has been eliminated. So with the digital disruption in full swing, why else have leaders become so heavily influenced by the data revolution?
1. Because it improves business
When it comes to executing business strategy, management can look to existing data to inform them of the best course of action. Data dexterous leaders may consider where the pain points exist within their teams and how they can use existing information to remedy them. These pain points arise when employee talent isn’t compatible with service offerings.
For example, management might bring in data scientists to dissect information collected for the purpose of understanding user experience. This way, the business as a whole will know which areas they should be focusing on improving and what they shouldn’t be bothering with.
Ethical data usage shouldn’t be overlooked when gathering information from customers and third-party providers, either. For leaders in business, this can be a humbling lesson in what it means to be responsible across all areas of customer obsession. With the introduction of the General Data Protection Regulation (GDPR) in the last year, companies are now being held accountable for how they use customer information and what they will do with it once it’s no longer useful. For forward-thinking leaders, it’s important that they have a chance to exercise the ability to take initiative in their role with coordinating company compliance with the GDP regulation.
2. Because it creates better customer journeys
While businesses should already know their target demographic, it’s imperative they stay on their toes when it comes to understanding customer needs. The sign of a data dexterous leader is one that can see disruptions to digital technology approaching and applies this knowledge when bringing solutions to customer pain points.
Emerging technology can be used as a driving force behind keeping a business flexible to accommodate user interest – which at times is unpredictable. For example, AI technology is becoming the main contender for replacing workplace operations. Businesses can use data gained from customer feedback as a useful tool to reduce the friction. To improve, upper management must first be prepared to face these issues as they arise. While it’s not possible to predict the future, previous data collected can at least provide a glimpse of what customers are more likely to be responsive to.
To be efficient in user improvements, businesses must have a solid understanding of how their customers use their products and platforms. They must identify what an ideal user experience looks like and what makes for a successful sales conclusion. Customer satisfaction can be a strong indicator of lasting loyalty; because of this, it is imperative that businesses should make thoroughly researched choices based on consumer feedback. In the long run, this will make for a more seamless approach to updating customer processes.
3. Because it helps make important decisions on upcoming industry trends
At one point, industry trends were a guessing game for insiders in big business. With estimations made based on consumer behaviour previously observed, there was a wide margin of trial and error. But with the wave of big data, this is no longer the case.
Industry leaders can now make solid predictions based on insights from data algorithms. Former Managing Director of Facebook in Australia and New Zealand Stephen Scheeler, recently spoke about the importance of decision makers knowing how to capture and analyse customer rich information while also making well-informed choices based on what is found.
No business operates autonomously within their market, so it’s more accessible to find out what other companies are using to attract customers based on their own research. Although for those who are ahead of the game, it is much easier to implement changes earlier because they have already validated their solution with testing and research.
It is recommended that businesses in general review data analytics every six months to ensure they are staying on top of trends. An exemption to this is if sales and operations rely heavily on digital tools and technology, as this particular market fluctuates far more often.
4. Because it shapes stronger leaders
Data dexterous leaders bring solutions to problems that don’t exist yet. That means they are always a few steps ahead when it comes to making decisions based on trends and seeing the most viable solution for a product or service. They also don’t make these decisions lightly when it comes to what influences their team and business at large. This is another reason data is so important to them; the success of their business hinges on how they use the data when navigating through new technology.
Data dexterity requires a clear understanding of the challenges faced when looking for answers to solve problems. Good leaders ask critical questions like:
- How will this data be used in a specific scenario?
- Which sets of data will provide the most information when measured?
- What is the desired outcome?
In valuing the research process, leaders begin to intuitively know how they need to think so they can succeed. In Fortune 500 companies such as Facebook and Amazon, leaders see qualities such as adaptability and customer obsession as a catalyst for their achievements.
Customers of these businesses are loyal consumers and trust that their happiness plays an integral role in all decisions made. This is a testament to how these companies got where they are today.
Do you think you have what it takes to lead a business through the digital disruption? Hone in on your skills by studying an MBA with SCU Online; call us today on 1300 589 882.