In my first article in this series, I established the critical importance for every sales leader to have effective sales reporting, analytics and eventually advanced analytics.
In this article, I will firstly explore building data culture and literacy, and what benefits can be gained by a more data-driven decision-making approach. This relates to the fact that data and analytical technology make better decision-making possible, but ultimately, it’s the company’s people that will have to interpret and make decisions based on that data.
Attitudes towards data and data literacy, therefore, play a critical role in the improvement of decision-making in the organisation, but it can’t adjudicate such levels if it has not assessed them.
Corporate data literacy is defined as the ability of a company’s workforce to read, analyse, utilise for decision-making, and communicate data throughout the organisation. Beyond having a data-literate sales team and workforce, businesses need to ensure these skills are used across the organisation if they are to compete and win in the fourth industrial revolution.
The Data Literacy Index Report revealed that a $500 million enterprise value opportunity exists through data literacy − now surely that is a cherry any company would want to pick?
This major academic study showed a correlation between company performance and workforce data literacy. It found that organisations with strong corporate data literacy exhibit up to 5% higher enterprise value. Moreover, while most business decision-makers recognise the importance of a data-literate workforce, less than 20% were found to be encouraging employees to become more confident with data.
Attitudes towards data and data literacy, therefore, play a critical role in the improvement of decision-making in the organisation.
The index also found that large enterprises with a higher corporate data literacy experience $320 million to $534 million in higher enterprise value (the total market value of the business).
Despite there being a clear correlation between enterprise value and data literacy, there is a gap between how companies perceive the importance and relevance of data, and how they are actively increasing workforce data literacy. While 92% of business decision-makers believed it important for employees to be data-literate, just 17% reported that their business significantly encourages employees to become more confident with data.
The index revealed that improved corporate data literacy also positively impacts other measures of corporate performance, including gross margin, return-on-assets, return-on-equity and return-on-sales.
Why is data literacy important?
If you are still asking questions like this, consider the advice of international research gurus such as the IDC, a global provider of market intelligence, which forecasts a tenfold increase in worldwide data by 2025.
According to the IDC, increasingly data-driven organisations will produce data-literate employees that contribute more to their roles and help businesses sharpen their competitive-edge in an aggressive global economy.
This is endorsed by Gartner, which notes that championing data literacy, and measuring its effectiveness by using relevant data literacy metrics, offers tangible business benefits. The global research house adds that as data and analytics strategies become integral to all aspects of digital business, being data-literate can enable organisations to seamlessly adopt existing and emerging technologies.
Gartner further confirms that in building a data-literate workforce, chief data officers (CDOs) − if you are lucky enough to have one −need to quantify and communicate the success of data literacy training by defining and tracking relevant metrics. This is described as a strategy that can transform the business while building loyalty with a workforce.
The antithesis of this is an enterprise with poor data literacy, which Gartner ranks as the second-biggest internal roadblock to the success of the CDO’s office and adds that by 2023, data literacy will become essential in driving business value, as demonstrated by its formal inclusion in over 80% of data and analytics strategies and change management programmes.
Gartner advises that companies begin assessing data literacy with these questions:
- How many people in the business can interpret straightforward statistical operations such as correlations or judge averages?
- How many managers can construct a business case based on concrete, accurate and relevant numbers?
- How many managers can explain the output of their systems or processes?
- How many data scientists can explain the output of their machine learning algorithms?
- How many customers can truly appreciate and internalise the essence of the data shared with them?
This is just one set of guidelines, but provide a reasonable starting point for the assessment. However, companies may need to pay special attention to the sales team, as when it comes to data and analytics, data literacy among sales professionals is found to be especially low.
For the lucky few who have a modern sales intelligence system, you may have run into the challenge of lack of adoption. This is another reason to set about the all-important task of introducing a data literacy programme to the sales team which will help to facilitate uptake and the effective use of data.
So, to synopsise, having data-literate management and staff is, to say the least, advisable but if you have no idea what the status of data literacy is throughout the organisation and specifically on the sales team, you won’t get out of the starting gates.
By Kevin van der Merwe, Sales director, iOCO Qlik.
