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Data-driven culture change: where to start?

Data is the new currency for companies of all sizes and industries. Direct marketers have understood this for decades, going back to when catalog print and mailing costs warranted the effort of devising and operating predictive models to optimize response rates. Today we have orders of magnitude more data, presenting orders of magnitude more opportunities to improve every business process. Those that take advantage of this treasure trove to cultivate a data-driven culture will see innovation thrive and customers delighted. The risk of losing out to the competition is too great to ignore the power of data.

Where to start? Start at the top! Leadership must inspire and promote data initiatives, and employees at all levels should be required to support all of their proposals with data. For instance, many product teams have a weekly meeting to discuss roadmap progress and propose new feature ideas. Each product manager should arrive armed with the appropriate data analysis to tell their story, which will enrich the discussion and effectively drive prioritization across the group.

Executives should lead by example, which means they should also support their strategy with thoughtful data analysis and well thought out key performance indicators (KPIs). The entire organization should be familiar with these KPIs so that they can perpetually be thinking about how to help achieve company goals. Implement a goal-setting framework such as Intel and Google’s Objectives and Key Results (OKRs) or Salesforce’s Vision, Values, Methods, Obstacles, and Measures ( V2MOM). Each methodology ensures that success is defined by meaningful metrics by executives, which then enables their direct reports to develop their own metrics that will contribute to the overall KPIs, and so on down the hierarchy until every employee has a metric to measure their success.

I'll illustrate with a real example from one of our clients that needed to improve customer retention, which they made their #1 priority. The first step was to analyze usage and revenue data to understand how cohorts of customers retained over various time frames (1 day, 5 day, 7 day, 14 day, 1 month, etc.) affected revenue. The team decided that a 5% increase in 7-day retention was the KPI. Now that the company had a strategy and a KPI, each team evaluated how they could contribute toward the goal. The email marketing team decided to devise a 7-day customer journey with optimal customer communication touch points, and their KPI was a 20% improvement in email open rates. The customer support team's KPI became a 50% improvement in support ticket response times. And so on, every team decided how they would contribute and measure their success.

Culture change is a key role of executive leadership, so data-driven leaders will inspire a data-driven culture. This journey starts at the top, but it also requires changes to many aspects of the business: data democratization, trust, data modeling, user experience, training, support, security, data science, analytics, etc. We will delve into all of this in subsequent posts.

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