Data, which used to be an underappreciated byproduct of business, has now become a resource that you neglect at your peril.
Those who use data wisely have competitive advantages and more profits. As a result, companies are increasing their focus on improving their data literacy. For example, the importance of data has led companies like AppNexus1 and Chevron2 to conduct internal data science competitions to identify and hone analytical talent.
But, as noted in the kickoff blog post to our series on data-driven organizations, merely having data does not ensure you have a useful interpretation of that data. And your core data science team and analytics dashboards can’t answer every question or weigh in on every business decision.
We believe it’s essential to have data-literate employees at all levels of an organization.
“A lot of people, especially executives, feel a sort of uneasy need to do something with data,” said data strategy consultant David Stephenson, founder of DSI Analytics, adjunct faculty member at the University of Amsterdam, and author of Business Skills for Data Scientists.
“They realize that other companies are doing it and they feel ‘I’m missing out. Either I’m losing a competitive edge or maybe I’m not even at table stakes’” Stephenson said, in an interview for this article.
According to both Stephenson and Kent Graziano, Chief Technical Evangelist at Snowflake, the key to making the right decisions regarding data literacy and the use of data in your organization is self-examination. Consultants and data analysis products can help, but only if you know why you’re employing them.
- Why is data important to you?
- What data do you have?
- Where does it come from?
- Is it relevant to your company’s success?
- What story or stories does this data tell?
Don’t be afraid of asking yourself, your peers, and your employees these sorts of questions. The answers can help you build a data-literate culture in your company.
Given that some people seem to be uncertain about their ability to interpret data to its fullest advantage, here is a short step-by-step guide to help you increase data literacy across your own organization. The steps include:
- Understand what data literacy means for your organization.
- Start your plan with an assessment.
- Communicate the data goals with everyone.
Understand what data literacy means for your organization
“Data literacy is a combination of things,” according to Graziano. “It’s being able to read the data and understand it and what it really represents. So, it’s one thing to have a spreadsheet of data in front of you, it’s another thing to understand what that data means.”
Data-literate team members should be able to answer the following:
- What does a given set of data mean?
- Where did it come from?
- How meaningful is it to the organization?
- Which data is relevant and which is not?
- How can you analyze the data for important implications?
As Stephenson puts it, “Data literacy in the modern enterprise is about understanding what data is available, how you can manage that data, and how you can leverage that data for different strategic and operational applications.”
Stephenson offers the example of a holiday booking company he worked with. “The company had access to the details of the properties they rented and the details of the customers who rented them. But there was more data waiting to be discovered,” he said. For example, by collecting and analyzing web analytics data, they could see what locations and features visitors to their website were looking for and which properties were viewed but not booked. They could also go to a public data source such as Google Insights for Search and compare the popularity of various vacation destinations, based on Google searches worldwide or within a particular country.
“Strategically, this could help them understand their customers’ preferences and where they should seek to focus growth efforts,” said Stephenson. Operationally, this could help them set prices to match demand, present the most relevant properties at the top of search listings, and flag owners whose listings were not producing good results.
Start your plan with an assessment
Here are questions you should strive to answer when creating a data literacy plan:
- How data-literate are we already?
- Is our organization ready to implement changes that make us more data-literate?
- How many of our employees would we consider to be data-literate?
- How many of our employees need to be data-literate?
According to Graziano, by examining the skill sets available to you and using these questions as the basis for an assessment, you’ll know where you’re starting from. The assessment will enable you to map the rest of your plan, including designing or subscribing to the right kinds of educational courses and knowing which employees will get the most benefit, fastest.
Bloomberg, Adobe, and Guardian Insurance are examples of companies finding success with their own digital literacy training programs.3 When designing these programs, what elements should you include? Basic statistical concepts? Common cognitive bias in decision-making? Risk management? Advanced decision-making frameworks? Perhaps all of these and more.
Communicate the goals of data to everyone
To achieve your data goals, everyone in your organization needs to be working in sync. They need to understand what data literacy is and how it can be used strategically in your company. Then you have to communicate the plan, how the organization will meet its goals, and their roles in implementing the plan.
Finally, you need to discover and share your method for using data to tell your story to clients and potential customers.
To understand more about data literacy, read the following:
- Business Skills for Data Scientists by David Stephenson
- How to build data literacy in your company by Sara Brown, MIT’s Ideas Made to Matter
- Data literacy necessary amid COVID-19 pandemic by Eric Avidon, TechTarget
- Don’t Just Talk Data. Be Data Fluent: How to UpSkill Your Organization by Martha Bennett and Cindi Howson, ThoughtSpot