In today’s fast-paced (exponentially changing) digital world, businesses must adapt quickly to remain competitive. One way to do this is to shift to Insights Driven Organizations (IDOs). IDOs use data, analytics, and even AI to improve decision making, drive innovation, and accelerate growth.
What is an Insights Driven Organization?
A data-driven organization uses analytics and data to generate actionable insights that serve as the basis for strategic (planning) decisions. While data-driven organizations focus primarily on collecting and analyzing large amounts of data, an IDO goes a step further by interpreting and contextualizing that data. The goal is to identify meaningful patterns, trends and predictions to drive the business forward.
For example, an IDO may use customer data and feedback to gain insights into pain points and unmet needs. These insights help them improve products and services to increase customer satisfaction. They also use the data to optimize internal operations and identify inefficiencies that can be eliminated. For example, tools like MoreThanDigital Insights help with holistic and unbiased analysis, bringing in important data like peer benchmarks and industry-relevant data that a company would not be able to analyze internally.
The main benefit of an IDO is the ability to make smarter, more calculated decisions based on data. This reduces risk and uncertainty and enables organizations to respond more quickly based on real-time insights. Becoming an IDO can bring numerous benefits:
- Greater efficiency – insights streamline processes and highlight waste.
- Faster innovation – ideas based on data insights accelerate growth
- Better customer experience – Insights personalize engagement
- Data-driven strategy – Insights help plan and set goals
- Future viability – IDOs continuously adapt and improve
Dimensions of an Insights Driven Organization
Transitioning to an IDO requires developing capabilities in multiple dimensions:
- Data & Analytics: Solid data analytics provides the reliable insights that organizations need. The focus is on sourcing high-quality data, applying analytics to gain insights, and effectively communicating insights to decision makers.
- Processes & Operations: Well-defined processes integrate insights into planning, operations, and management. Agility is required to respond quickly to insights.
- Technology & IT: Technology infrastructure must securely support data management, analytics, collaboration, and access to insights.
- People & Culture: Culture change is needed to make evidence-based decisions. Education ensures that insights are properly used and interpreted.
- Strategy & Innovation: Continuous innovation, driven by insights, helps IDOs adapt to market changes. New technologies and data sources also enable more sophisticated analytics.
- Customers: Customer insights are the foundation for engagement strategies and product/service improvements. Deep customer understanding is a priority for IDOs.
Transitioning to an IDO comes with hurdles to overcome:
- Cultural resistance: adopting data-driven decision-making can face internal resistance, especially if it disrupts existing ways of working. Senior leadership must communicate the need for and benefits of data-driven decision making.
- Talent gaps: Data science and analytics skills are in short supply, but critical to gaining insights. Investing in talent development, hiring specialists, and forming partnerships can help close gaps.
- Data issues: without high-quality, trusted data, insights lose value. Governance and processes to ensure data quality are essential.
- Silo efforts: Insights gained in silos are of limited use. A unified infrastructure and strategy prevents duplication and enables insight sharing.
Analysis paralysis: Too much data can lead to “paralysis” and inability to take decisive action. Focus on the most meaningful data associated with strategic goals.
Best practices for converting to an IDO
Organizations can set themselves up for a successful transition to an IDO by:
– Executive commitment to leadership, investment and accountability.
– Fostering an understanding at all levels of the value of data-driven decisions
– Breaking down data and analytics silos to spread insights throughout the organization
– Use off-the-shelf analytics solutions before developing proprietary tools
– Prioritizing capabilities to contextualize data and extract insights over crunching numbers
– Facilitating seamless data access and embedding insights into workflows and processes
– Continuously monitor performance indicators to quantify the impact of insights
Asking the right questions
To become an IDO, we must first challenge assumptions and the status quo:
– How could data and insights better support our strategy and innovation?
– What untapped data sources could provide valuable insights?
– Does our culture support evidence-based decision making?
– Are we investing enough in our data and analytics capabilities?
– How can we make insights accessible to our employees?
Insights-driven organizations (IDO) are the future of data-driven business strategy and decision making. The shift requires investment and organizational change, but the benefits can be immense. Companies that learn to continuously collect, analyze and act on insights will gain competitive advantage and seize new opportunities faster. With the right vision and commitment, the shift to an IDO can set any company up for long-term success.
In the coming years, we will see a clear distinction between companies that understand how to leverage insights and companies that miss the boat. After all, McKinsey found almost a decade ago that insights-driven companies can be up to 19 times more profitable. As an entrepreneur, you should now ask yourself the question: Am I turning myself into an IDO or are others overtaking me?