Tag Archives: Culture
How a Feedback Loop Can Fuel a Culture of Innovation and Collaboration
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Feedback loops surround us everywhere. Feedback loops are a defining characteristic of any intelligent system, whether that’s a person, a group, or a company: An external stimulus provokes a required change to a situation. To determine the best way to react, we may test different options, measure the kind of impact they had, share that feedback for analysis, then proceed with an action that has been optimized based on the process. When all these steps work together, systems can best adapt to ever-changing internal and external circumstances and create an environment where innovative new ideas can be put into action to achieve stronger desired outcomes — sometimes completely outside the realm of what was originally conceived.
One organization that has achieved tangible success and sustained innovation through sophisticated feedback loops is the Mercedes-AMG Petronas Formula One (F1) Team, specifically in its car design with regards to aerodynamic, hydraulic, and dynamometric testing. Through tight-knit collaboration, advanced analytics, and an obsessive desire for improvement, the team is able to optimize its testing time of various car components per FIA regulations in order to create the best race car possible. The more tests the team performs, the more they can measure what’s going right, what’s not, and share that with the broader team to analyze and optimize performance. In F1, monumental improvements are measured by the millisecond, so optimizing the performance of the car is crucial to better outcomes.
How can your business benefit from a feedback loop, even if you’re not a world-renowned motorsport team?
The method the Mercedes-AMG Petronas F1 team uses to test aerodynamic components can easily be translated to other industries: applying speed of learning, quickly analyzing data, and deriving insights to make more informed decisions. Whether you’re optimizing engine performance, product performance, or sales performance; businesses can benefit by taking a closer look at various aspects of their organizations to identify areas for significant improvements, whether it’s reinventing the way their business is done, overhauling their infrastructure and related processes to achieve operational excellence or increasing intimacy with their customer base.
Reinventing the Insurance Business
Insurance provider AA Ireland took the idea of a feedback loop and applied it to the pricing of its services. The company implemented dynamic pricing that uses analytics and machine learning to collect and listen to feedback from the market and change pricing based on that. The feedback loop of dynamic pricing enables insurance providers to rapidly react to market conditions. They can change prices automatically by pricing based on customer attributes like payments, claims, and driving record; policy acceptance/rejection rates; sales campaigns, and digital marketing initiatives. And doing so leads to an increase in customer conversion, reduces churn rates, and attracts new and desirable customers with targeted premium pricing.
Optimizing Operational Processes for Better, Faster Decisions
The implementation of a feedback loop can also enable organizations to innovate with the latest emerging technologies. Invitalia, an agency of the Italian Ministry of Economy and Finance, looked to the feedback loop in process mining technology to improve its business processes across purchasing, fund management, and service desk support. As a result, the agency reduced time and costs by identifying and removing process bottlenecks, ensuring consistent company policy compliance, and improving the performance of fund approval processes.
Understanding Customers Better, In Order to Serve Them Better
Probiotic drink company Yakult implemented a feedback loop using advanced analytics to identify the elements in its marketing mix that were driving a spike in growth, despite more competition entering the space. Applying this knowledge to future marketing budget decisions fueled additional growth. While the company has a limited product line, it was able to gain a competitive advantage by understanding the market better than its competitors.
As you can see, feedback loops come in a variety of forms and don’t only apply to manufacturers. Those in any department in a company and any industry can use feedback loops to foster a culture of collaboration and innovation.
Learn how Mercedes-AMG Petronas F1 handles data to extract insights from aerodynamic, dynamometer, and hydraulic testing to assess and improve the reliability of components for a competitive advantage. Contact us to learn how we can help your organization build a feedback loop that can help reinvent your business, improve your operational efficiency, and bring you closer to your customers.
What Is HR’s Role In A High-Performance Culture?
Operating within a forever-changing and fast-paced context full of disruption and challenges, the role of HR has become more relevant and important than ever. Whether it be the perennial challenge of having the right people in the right place with the right skills, the rise of compliance, or the changing preferences of the workforce, the relevance of HR has never been higher.
Organizations today need to become as agile as a startup. They are faced with disruption every single day; loyalty isn’t what it once was, so having “a finger on the pulse” to ensure the organization is in a position to execute has become a challenge that HR must be at the forefront of.
In simple terms, HR must become a rigorous facilitator of change and a disruptor within the organization. However, that doesn’t mean it is all about innovation and new ways of working; it is also about reminding an organization that executing the basic fundamentals can also result in great success.
Every organization has a strategy that needs to be executed. The collective skills, talents, and brilliance of every element of the workforce needs to be leveraged to help the organization execute and ultimately succeed with its strategic goals.
This is where HR needs to bring its design capability, its ability to understand the nuances of human beings, to reimagine an experience with simplified processes that ultimately bring collective “clarity” in terms of what people need to do (goals/objectives) and “standards” in terms of how well people are executing against those goals – infusing leaders with the confidence and capability to deliver meaningful, relevant, and frequent feedback to ensure that everyone is clear on performance impact and has the ability to take corrective action if they are not. Leaders have a fundamental role to play in creating the climate and conditions for their team members to perform at their very best every day irrespective of their role.
Every human being requires a number of things to happen on a daily basis to enable them to feel engaged, motivated, valued, and fulfilled. All employees seek meaning and purpose in their work, and getting recognition for their efforts is still one of the most important pre-requisites for job seekers. A thank you does indeed go a long way.
As James March of MIT commented, “Neither success nor change requires dramatic action. The conventional routine activities that produce most organizational change require ordinary people to do ordinary things in a competent way.” Executing the basic fundamentals brilliantly every day results in the “needle being moved” for employees and organizations.
In these turbulent times, HR professionals are wise to recognize The Importance Of Understanding The True Nature Of Stress.
This article originally appeared on HR Grapevine.
Digital Culture And Enablement In Finance Transformation Journeys
Part of the “Digital Finance Transformation” series that provides a framework for CFOs to move forward confidently on the journey toward digital transformation
In finance transformation journeys, one of the hardest parts is to create a positive climate that supports an innovative environment for change. This is one of the most mentioned key issues within the area of finance transformation. Digital innovation in business areas like logistics or sales is promoted much more heavily and therefore they serve as attractive role models for finance. Creating a tailored change-management plan that considers the organization’s culture is crucial for all CFOs.
Elements of a digital culture
Norms, values, and symbols are key indices that shape decisions, actions, and the behavior of organizational members. An organizational culture can be defined as a shared pattern of thinking, feeling, and acting. Thus, a digital culture evolves in digitally transforming companies. It’s a constant change process as part of a vision, especially for CFOs. The elements must be specified for financial departments based on the maturity of their digital culture.
The key elements of digital cultures are:
- Leadership in a digital culture fosters autonomous working conditions for accountants, which encourages self-reliance, initiative, and self-management, as well as creating an environment where explorative working is desired.
- An organization focused on entrepreneurship, digital technologies, and agility. It is also influenced by aspects of the leadership culture that support more flexibility to run digital projects.
- Performance combines elements like entrepreneurship, innovation, and learning. Furthermore, it includes a culture of failure that supports employees trying out new ideas and approaches.
- Cooperation within the organization is the main characteristic. It comprises knowledge-sharing and interdisciplinary and inter-divisional working. Collaboration and joint development with customers are also part of it.
- Innovation combines entrepreneurship and learning as well as agility.
- Change is related to the culture of innovation and contains the four elements of entrepreneurship, agility, innovation, and learning.
- Growth, new business, and brand relate to agility as the keys to the use of digital technologies and digital processes.
- Stakeholder and relationship are main characteristics of a digital culture leading to innovation and learning. In addition, customer orientation is key for a successful stakeholder and relationship culture.
- Communication in a digital culture is enhanced by digital technologies and digital processes. They allow a new type of collaboration and cooperation within the organization and with interfaces to customers.
Changing existing into digital cultures
In a fast-changing environment, companies can stay successful if they change their holistic ways of working – if they change their culture into a digital culture. This insight can only be obtained by creating urgency for everyone. Providing digital tools in the finance area – for example, tablets – is an important requirement of today’s job market, but it also helps to lead a company into a digital behavior. Going one step further and in the context of financial IT projects, an agile methodology is essential to reach the right degree of innovation.
Alongside this, the measurement of success has changed. A classical sequence approach with one big “go-live” at the end of a project must be rethought. In addition, the requirements for project members, including the leadership team, have changed. They must enjoy the trust of all concerned stakeholders and pursue the same goals. This can be achieved only if employees of different departments and stages are united.
The vision and strategy must be communicated well. When all involved parties can muster a common understanding for an agile way of working, the risk that a transformation project will be canceled decreases. The motto here is: high tolerance for failures. Those who fail early learn faster. Therefore, a unified vision with a suitable strategy must be developed. At best, it has a motivating effect on employees and acts as a support during the first steps of change.
For a smooth transformation, the leadership team needs to remove potential obstacles. This ensures a higher commitment within all stakeholders as well as trouble-free business continuity. To keep all necessary stakeholders involved, short-term successes should be communicated and celebrated. This illustrates the transformation progress and keeps all parties in a good mood, which increases their commitment. Change is a constant companion in times of digital businesses. Therefore, a mindset of a steadily changing business environment needs to be established within the company. Only then can the company adjust to changing market demands and business requirements.
Takeaway
Changing a corporate culture to one of digital transformation is certainly not an overnight process. Every cultural change takes time – from the initiation to the moment when the culture shapes the action – and can only take place step by step. In summary, it’s best to carry out cultural change in areas where technological change is particularly relevant to business activity or for reasons such as cost optimization. It is important to focus on the corresponding quick wins, which in turn contribute to reinforcing cultural elements.
Dig deeper into “How CFOs Are Successfully Navigating The New Reality Of Uncertainty And Change.”
Follow SAP Finance online: @SAPFinance (Twitter) | LinkedIn | Facebook | YouTube
Establishing A Digital Culture With A Chief Digital Officer
Part of the “Digital Finance Transformation” series that provide a framework for CFOs to move forward confidently on the journey toward digital transformation.
Once you have recognized the importance of digital transformation for your company to stay competitive, your job as the CFO is to take the lead, pushing the initiative forward. And implementing a chief digital officer (CDO) is a very useful option.
Taking an advisory role, the CDO enables the CFO to lead the financial department on the journey of digitalization, with the aim of improving the cost structure and the quality of service. At the same time, the CDO is the key person supporting the CFO in the dialogue with the IT department. The CDO works comprehensively in the areas of finance and IT, responsible for the cultural change on the one hand and the connection between these two areas on the other.
What is a chief digital officer?
The CDO is a member of a company’s senior management, responsible for the company’s digital strategy and development, building new digital services and business models that likely did not previously exist. This role is distinct from that of the CIO, who leads the strategic and operational direction of IT with a primary focus on the stable and efficient execution of the current business model.
In today’s environment of major changes in the corporate world, the role of a CDO is more important than ever, and its significance will certainly increase. The CDO needs to build and position a digital team, which helps communicate the new digital strategy to employees.
The CDO’s responsibilities
To begin with, the CDO oversees the development of the digital strategy, which is derived from the corporate strategy, and then ensures that it is implemented and anchored in the corporate culture. That entails monitoring and reviewing the changes occurring during the implementation. In developing new business models, the CDO is responsible for the digitalization and simplification of business processes to improve their efficiency and agility. It is the CDO’s priority to connect the digital and the analog world to achieve a seamless multichannel customer experience.
In large part, the CDO’s approach resembles that of a more business-focused CIO or CTO. The efficient use of the latest digital technologies is the main requirement for development and successful implementation of effective digital business models. In this position, the CDO contributes to the company’s competitiveness and future viability.
How to define and shape the CDO’s role
The CDO can be defined implicitly or explicitly. For smaller enterprises, the implicit definition is mostly the way to go. There, the CDO carries neither the “chief” nor “officer” title as a part of the role. Typically, the CFO also covers another position, commonly that of CIO. In this case, bear in mind that someone taking on this dual role might have challenges in balancing budget and culture and deciding on priorities.
Large companies are more likely to define the role explicitly. There, the CDO often has a team that’s in charge of developing new ideas in the context of the digital strategy and realizing them as prototypes. Another aspect of the CDO’s job is to work with the management team with a view to steering the company toward digitalization. Both of these mandates are important to accelerate the company’s pace in technology adoption.
For very large, complex enterprises, an extension of this explicit definition is a functional CDO for each functional area. In this case, all of the functional CDOs should be aligned on corporate culture and values and agree on the core principles of the consulting, advice, and governance they provide.
The prerequisite for successful CDO
A CDO is relevant for all types of companies, regardless of size or industry. For the successful implementation of a CDO, leadership needs to recognize the importance of digital transformation for the company in general and its financial area in particular. The CDO’s scope will involve fundamentally changing the corporate culture and identity and is crucial to both the finance and IT departments. While the CDO has an essential role, that role still tends to be underrated. But there is no question that its importance will grow in the coming years.
Follow SAP Finance online: @SAPFinance (Twitter) | LinkedIn | Facebook | YouTube
The Synergistic Energy Of Culture And Growth For Midsize Businesses
By Kristi Sanders
A 401(k) and medical coverage are nice perks that most employees receive from their employers. But what about a one-week, all-expense paid vacation at a company-owned Swiss chalet, service sabbaticals, or elder care? Believe it or not, midsize businesses are increasingly applying such out-of-the-box thinking to attract and retain employees in an era where job-hopping is the new normal.
Unfortunately, opportunities to take advantage of these perks fall to the wayside during times of growth. Many business leaders know that it’s just not feasible to tell customers that you can’t deliver on their expectations quickly because you don’t let your people work on the weekend. When you are fighting for every client, you are going to do what it takes. This challenge leads to managerial behaviors and decisions that neglect the psychological and social well-being of their employees.
How can business leaders balance the realities of running a midsize company with perks that keep employees engaged?
The importance of balancing employee well-being and customer needs
According to the SAP white paper “Creating Resilient Cultures: Why Businesses Need to Invest in Employee Well-Being,” this leadership trap can introduce profit-stealing risks such as:
- 4% increase in healthcare costs, nearly three times the rate of inflation worldwide
- US$ 2 trillion lost from chronic illness, injuries, stress, and disengagement
- $ 1 trillion in reduced productivity due to depression and anxiety disorders
- $ 411 billion in costs introduced by sleep deprivation
Well-being programs are often thought of as a “nice thing” to do for the workforce, not necessarily a way to improve business operations. However, most companies realize that this notion is untrue as soon as they base well-being policies on core business values, goals, and practices. Even a decision to start the workday 15 minutes later allows employees to attend to their personal needs and arrive to work safer and stress-free, which can pay dividends in the workforce’s ability to meet customer demands productively without costing a penny.
The secrets for a culture of engagement and growth
Nurturing a positive workplace culture is even more relevant for midsize companies because they don’t always have the same heavy-hitting benefits and resources available to throw at it, compared to their larger competitors. But they must also adopt intelligent, fast, and affordable best practices, including the following, for pinpointing culture gaps, workforce needs, and improvement opportunities.
1. Asking and listening to people of all roles continuously
Feedback collection and analysis is a simple and affordable way to impact workplace culture significantly. HR or managers can sit down with employees to discover honest concerns, performance obstacles, career paths, and ideas that can help operations run better.
Desired changes may seem small to the business, but this is the kind of leadership that creates the cultural shift organizations need to align with their employees’ well-being as a guiding principle. Remember, employees quit, underperform, burn out, or disengage when organizational practices – including unsupportive leadership behaviors, stressful team dynamics, and toxic job conditions – are insensitive to their needs.
2. Know when to ask more from employees and how to reward them
Having to pull a weekend in the office to fulfill a client’s last-minute request can happen sometimes. But knowing that you will be encouraged to take Monday off so you can get a break makes those sprints possible. It is when we expect that employee to show up all week, after going strong on the weekend, that we start to compromise both their own well-being and also their work product. We are not machines; we need breaks from intense work to recharge and reset our minds and bodies.
Business leaders need to think about how they can reward employees for going beyond their job requirements. Opportunities such as flexible office hours or shift schedules can encourage and empower employees to do more without neglecting their personal responsibilities.
3. Evolve the culture to fit changing workplace attitudes and market needs
The culture of a workplace cannot become a static system of operational requirements. Instead, leaders should continually think about the type of culture they want to create and grant the freedom to change as new personal needs emerge. The key is to provide a level of connectedness that keeps people engaged professionally and fulfilled personally.
For example, a variety of studies have indicated a rise in feelings of loneliness, social isolation, and meaningless relationships across all demographics, which directly affects workplace performance. Businesses can help fill that gap by hosting gatherings such as happy hours on Friday nights, family-friendly outings, or special-interest after-work clubs.
5. Consider workplace fit when choosing new hires
Creating a culture that helps grow the business takes more than just hiring the best and brightest people available. In fact, recent studies from Google show that hiring for culture fit makes teams far more successful than hiring the best and brightest all the time.
It’s critical to develop an organization that works well together and shares common interests or values, even though employee backgrounds are diverse. With a more well-rounded approach to recruitment and hiring, HR teams can consider how candidates fit in with the rest of the company, creating a community that makes employees feel connected to the company.
Culture evolves with empathetic change, not big-ticket perks
At the root of every business that continues to grow, there’s a workplace culture that ensures every employee contributes. Fostering such a positive, impactful culture may not happen overnight, but it can be done with a commitment to making small, consistent changes that oftentimes require no or little financial outlay but promote mental, social, and emotional well-being.
Invest in employee well-being to drive optimal results for your growing business. Read the SAP white paper “Creating Resilient Cultures: Why Businesses Need to Invest in Employee Well-Being.”
Culture Eats Strategy For Breakfast, Innovation For Lunch, And Transformation For Dinner
Recently I was invited to participate in a panel at #DigitalTakover, the biggest event on digital transformation in southeast Europe. The topic was Everything can be reduced to an algorithm – except employees.
To prepare for the discussion, I asked people about their point of view. Their answers were unanimous: “Of course, employees are the most important asset in every company!”
That got me thinking: How many companies actually really live by the belief that employees are their most important asset?
If the answer is such a no-brainer, why are we even discussing it? If you really think about it, how many people do you actually know who love their job and the company they work for? How many people would honestly say that their company treats them as the most valuable asset?
In today’s time of digital transformation, the truth about whether companies live by the value of putting the employees first is reflected in the organization’s culture.
Back in the last century, Peter Drucker said, “Culture eats strategy for breakfast!” This statement holds true today. I would add that the same culture will eat innovation for lunch, and transformation for dinner. What I mean is that the organizational culture defines the way companies innovate and ultimately how they transform.
Fast-forward a few decades, and we can see that the economies that have evolved from agrarian through industrial to service now have evolved into the “experience economy.” Now more than ever, companies should focus on fostering a culture that defines clear values and providing a quality experience to both to their employees and their customers.
The reality, though, is that companies are really struggling to define their culture and stay true to their values. As Simon Sinek puts it, “Most leaders don’t even know the game they are in.”
You are what you eat: Define your culture
As in dieting, companies become what they eat. If they value teamwork, they will become team-oriented. If they live innovation, they will become innovative. If they foster change, they will become agile. But if they preach a healthy lifestyle and secretly eat junk food, companies cannot stay healthy.
So, if your company aims to survive in today’s fast-changing business environment, you need to answer these questions:
- Who are you?
- What do you believe in?
- What’s your purpose? Why you are doing what you are doing?
Once you know your culture and you have defined clear values and beliefs, you will attract employees who will strengthen your business’s health and help you deliver on the defined strategy.
Take the risk – try new flavors!
Diversity is good: It fuels innovation.
As you develop a healthy culture, let your employees add their own spice – encourage them to share ideas, opinions, different solutions, critical thinking. Give them the freedom to add flavor to your business through innovation and diversity. Give them a chance to express themselves.
All you have to do is to provide an environment where it’s OK to make mistakes, take risks, and even be part of a failure. Fail quickly, learn the lesson, and move on to the next quest. For example, check out the story of Astro Teller from Google X.
Are you eating the right things? If you want to stay fit, make sure you transform the way you eat. As in this video from Raj Ramesh, an organization, just like an individual, needs to focus on the right factors in order to stay fit. In my experience, 70% of diets fail. According to McKinsey, 70% of business transformations fail.
When we speak about digital transformation, we usually look at processes, business models, and technology. Similarly, when we want to lose weight, we focus on physical exercise and watching the scale. But these factors comprise only 20% of the effort; the 80% that really matters involves what, when, and how we eat.
So why do we focus on the irrelevant factors? The answer is simple: Because it is easier. It is very human to take the path of least resistance. Going to the gym and doing sports is much easier than changing poor eating behavior and habits. (Is there anything better than enjoying a bucket of ice cream while you watch a movie before bed?)
However, if you want to lose weight for good, you need to change the timing and the kind of food that you eat. In the same way, organizations that wish to see successful transformations need to focus on their employees.
As a leader, if you want an organizational transformation to succeed, focus on empowering your employees to lead the transformation. Transform the individual to transform the collective. Lead by example and build a vision of the future that employees can relate to – and when things get tough, don’t let up!
In that context, a statement like “My people are my organization’s true asset” will taste very good.
Bon appetit! Stay fit!
What is your organization’s recipe for leading a successful digital transformation?
For more digital transformation strategies, see “3 Tips For Bringing Digital Transformation To An Entire Enterprise.”
New eBook! Enterprise Data Marketplaces: Enabling a Data-Driven Culture
Syncsort has released a new eBook, “Enterprise Data Marketplaces: Enabling a Data-Driven Culture,” which is now available for download. In the past few years third-party data marketplaces, often provided as Data as a Service, have taken off. But, most organizations already own the data most relevant to their business. That’s why the most successful organizations are applying the concepts of external data markets to create enterprise data marketplaces, where users can easily find and access data from across the company that is clean, trustworthy, and auditable.
Enterprise data marketplaces overcome the limitations of previous solutions and give you the best of each in one central repository: the volume and variety of the data lake, the veracity and auditability of the data warehouse, and the velocity and specificity for purpose of the data mart. Analytics teams and business users can shop and find the data they need, prepared and combined for ever-expanding applications.
However, there are some potential roadblocks when creating an enterprise data marketplace. These can include:
- Scattered and difficult to access datasets
- Cleaning massive volumes of data
- Combining and deduplicating data
- Keeping the data fresh
- Tracking data lineage
Though these can create difficulties, some are avoidable with some preparation.
Find out more and download our eBook today! Learn how organizations are embracing enterprise data marketplaces to drive their strategies forward.
Microsoft Power BI Reports and Your Company’s Data Culture
How to Use Microsoft Power BI Reports to Create a Company Data Culture
There’s no doubt about it: our world is data-driven. Virtually every choice we make is informed by data, whether it’s an everyday purchase, an important trip, or a big life decision. But despite this fact, businesses large and small are still failing to fully capitalize on the huge amounts of customer data available to them.
Of course, some businesses have caught on to trends in . They’ve learned that by creating reports, they can help foster a “data culture” in their organization. By creating a data culture, employees will naturally begin to utilize the available metrics and customer data in your organization’s CRM for making business decisions. The more that employees are presented with relevant data which can inform their decision making, the more likely your organization is to make profitable, competitive decisions.
But how do you foster a data culture in your organization? The technology piece is surprisingly easy: Microsoft Power BI integrates seamlessly with Dynamics CRM, as well as other CRM solutions and Microsoft products. Below, we’ll outline five easy steps to get your organization on track when it comes to using data effectively.
1. Prep Work for Power BI Reports: Ask Your Data Questions
Before diving into the technical aspects of generating Power BI reports, there’s an important first step to take. You need to decide what questions you want to actually ask your data.
What data exists that you haven’t analyzed yet? How do you want to use this data to make decisions? For example, could you use existing data about your best customers to help you target new prospects?
Take note of some of the questions you want to ask before moving forward.
2. Use Power BI to Access Your Data
Now, on to the technical aspects of accessing your data.
Regardless of which CRM you use — whether it’s Microsoft Dynamics CRM, Salesforce, or another program — Microsoft Power BI makes accessing your data easy. Power BI connects automatically to the vast majority of popular CRMs, and it can even be linked directly to a database for real-time and/or automated reporting.
Once Power BI is connected to your CRM of choice, you can proceed to the next step.
3. Create Stunning Reports with Power BI
Looking at data isn’t always fun. In fact, poring over spreadsheets for hours at a time can be mind numbing. You can only look at rows and columns of numbers for so long before everything starts to blur together. And, of course, presenting data in this form to your organization’s employees is unlikely to inspire data-driven decision making.
With Power BI, you can create stunning visual reports and share them with team members in a flash. Drag-and-drop functionality allows you to create a wide array of visualizations using a range of business data. Options include bar charts, stream graphs, and even complex radar charts.
4. Use Power BI’s @Mentions Feature for Maximum Engagement
It’s easy for a spreadsheet of data to get lost in the shuffle. But with Power BI, you can ensure that team members are tagged and have access to the reports they need.
With your team connected to Microsoft Office 365, tagging a team member on a report is as easy as using the @mention feature.
A user might tag their boss in a report:
…or congratulate someone on work well done:
5. Refine and Grow
Congrats! Your organization is now using data to make smarter decisions.
The next step is to refine your data collection and analysis processes over time. As more users within your organization begin to actively participate in data analysis, you’ll begin to build a data culture within your organization.
Are you ready to become a full fledged data-driven company? Looking to integrate Power BI into your organization’s processes? and learn how we can help!
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Why You Need A Culture Of Analytics (Part 2)
Part 2 in a 3-part series. Read Part 1.
Finance people see something happening in the numbers every day. Items in the P&L and balance sheet are constantly on the move, and non-financial metrics are all over the place. It’s not that you lack information, but rather you need to structure it in a way that you can both understand and use it to facilitate a dialogue with your stakeholders. The structure should help you with the what. Once identified, you need to drill down into the numbers to understand exactly where unexpected changes happened. Without knowing the where, you will be asking questions to business stakeholders like you’re looking at a map without knowing where you’re going. Your questioning will be very ineffective, and you’ll never get to the why.
Add curiosity to the finance function
To get further to the why, you need to start asking questions. “So, based on what we see, can we explain what happened with the non-financial metrics?” You also need feedback from the front line. Without asking questions or having an in-depth business understanding, you will never get to the why. You need to add inquiry and curiosity to your finance function to get to the next level.
Remember, when we say questions, we’re not talking about the typical finance questions of: “Why didn’t you hit your targets?” or “Can you please explain this negative budget variance.” These questions typically lead to defensive answers, so you need to ask in a way that encourages the business stakeholders to talk about what happened during the period you’re discussing. The data will lead you in the right direction in terms of what questions to ask.
Also, you need to make sure the questions are open-ended like: “Let’s talk about how business is doing in segment A or geographical area B.” Don’t just ask about performance in underperforming parts of the business. Ask about places where the business is doing well, as opportunities can be found all over the place. Uncovering the why is also what will help you deliver insights to your business stakeholders. Piecing together information from the numbers and your stakeholders will enable you to share with them things they don’t know.
Don’t stop there
Now comes the big challenge, though! Wait, what!?! I thought I had already stepped way out of my comfort zone getting to the why! That might be true, but you cannot stop there. To truly build a culture of analytics, you need to be able to make predictions about what might happen if you take certain actions and make recommendations about how to improve performance.
It has to do not only with gathering insights about what, where, and why, but also about creating foresight into what will happen if we do XYZ. Once you can start to have an opinion about what could happen in the future, you’re much better situated to make recommendations as to how to improve business performance. Otherwise, you will likely take many wrong actions because you took for granted that history will repeat itself. Sometimes it does. Sometimes it doesn’t.
How to build an analytics culture
In this article, we’ve explained the end goal of the analytics culture. But how can you build such a culture? It’s all about mindset, people, process, and systems, which we will examine in Part 3 of this series.
Learn why have AI, machine learning, predictive insights, and digital assistants have become the must-have new tools of forward-thinking CFOs to drive business performance.