By Nakul Munjal
Brand system strategist
The field of behavioral economics shows in no uncertain terms that intuition has limitations as a decision-making tool. Leaders realize this, but insufficient analytical capabilities–including the lack of an analytical culture–prevent their organizations from becoming as data-driven as they need to be.
Because analytics is so important for both decision-making and discovery, many executives want to adopt it on an enterprise-wide scale. In fact, a 2010 report, Analytics: The new path to value, by IBM Institute for Business Value, found that more than 50% of corporate leader respondents had analytics as a top priority for their organizations. Accordingly, astute business leaders are bolstering technological resources to enable enterprise-wide analytics and shifting their hiring policies to attract more analytically-driven talent. Despite this growing desire to adopt analytics through new technology and skills, many leaders are having difficulty creating a lasting impact on their organizations’ decision-making and discovery capabilities. Instead, these leaders are finding that their organizations simply don’t have an analytical culture in place.
What is an analytical culture? Like any culture, it’s the shared beliefs that unite a group across organizational boundaries and influences its behavior over time. The behaviors exhibited in an analytical culture stem from a core belief that, when analyzed properly, data contains business value. This belief manifests itself across analytical organizations through high degrees of data sharing and transparency, a pay-for-results philosophy, and a willingness to follow through with analytically-driven actions. In such organizations, tradition, sentimental attachment, and intuition take a back seat to cold, hard facts.
Managers who thrive in analytically-driven cultures seek out underlying truths and the identify root causes of business issues. They create a “pull-verses-push” orientation to analytics; where senior leadership directly engages in seeking specific analysis, rather than just consuming what they are given. Most notably, these managers openly use the analytically-based results to make decisions and follow through with action. As a result of such actions, these managers reap the benefits of both, greater decision-making certainty and new discoveries that lead to uncharted business opportunities.
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