According to a recent study published by the Economic Intelligence Unit and PriceWaterhouseCoopers, 79% of executives make a “big” decision every quarter and one in three business leaders place the value of these decisions at $1 billion or more. However, when it comes to using data and analytics, just 32% of the executives in the study characterize their decision-making process as “highly” data-driven.
One way to help convince senior management the benefits of data-driven decision-making is by demonstrating clear examples of successful data-driven practices. For instance, of the 32% of executives in the EIU/PwC study who characterize their decision-making as highly data-driven, that group was three times more likely to report solid improvement in decision-making over the past two years compared to those leaders who were not highly data-driven.
A respected executive who champions data-driven decision-making can help persuade his C-level peers that a data-directed approach can lead to consistently better business and operational results. For instance, senior executives for a consumer packaged goods (CPG) company are able to see from weekly sales reports that sales for a particular brand have slipped in recent weeks. However, unless they take a closer look at the data, they won’t be able to determine the root cause of the sales downturn or know the best actions to take.
A data-driven line of business (LOB) leader can demonstrate to his or her peers how the use of customer and market data with analytics reveals that discounting by a rival brand has contributed to the softened sales but that it is only one of the factors leading to the decline. A closer examination of the data uncovers that the company’s product is understocked in several key markets which also has contributed to the sales dip. Such insights can enable members of the senior leadership team to recognize how a more comprehensive understanding of the customer and market dynamics can enable them to get to the heart of business issues quickly and more effectively.