Fact-Based Decision Making: Driving Cultural Change

In my last blog, I discussed how a commitment to collecting and analyzing the right data can help your expansion-stage company quantify risks and make decisions. To fully leverage the power of this analysis, however, your organization will need a culture of fact-based decision making that will ensure your conclusions are accepted, implemented, and built on over time throughout your company.

That’s not always easy. As any executive knows, it’s one thing to talk about changing your company culture, and an entirely different thing to actually succeed.

3 Ways to Effectively Implement an Analytical Culture

1. You need more than just the executives to buy in.

While culture change always starts at the top, it can’t end there. The decision makers within your organization who aren’t stats buffs still need to understand the statistical rationale behind your business decisions if they’re going to fully embrace and implement them. Ground-level data collection is also enormously important, and if the people collecting it don’t know why it’s useful, they likely won’t give it the attention it deserves.

The proper solution is educating all levels of your organization about your process for analyzing the company’s data, and giving them as much transparency into those decisions as your competitive intelligence policy will allow. Hiring a few statistical wizards and letting them crunch numbers in isolation isn’t enough.

Additionally, you’ll want to present your conclusions in an accessible way, that doesn’t take a PhD in stats to understand. Leave the models and confidence intervals to the analysts and focus on the big picture.

2. Start small.

Sweeping organizational changes are often initially met with skepticism, especially if they require a large commitment of resources up front. The best way around this is to introduce fact-based decision making incrementally to your company, beginning with a smaller project (or short phase of a larger one) that can demonstrate its value quickly and cheaply. As the philosophy starts to catch on and your employees begin to trust the process, you can increase the scope and length of your statistical projects.

3. Be constructive.

While nobody’s going to admit it, a large part of the reluctance to adopt fact-based decision making stems from the fear that when the facts are revealed they won’t be flattering. This isn’t unfounded. Any successful statistical project will tell you that something you’re doing isn’t working, and some people may feel threatened or attacked by this conclusion.

It’s important that everyone understands that the ultimate goal of fact-based decision making is to make the company and its employees better and more efficient, rather than to evaluate them. While this distinction might seem irrelevant to an analyst, it does really matter. You should start with projects that save your employees time and make their lives easier before graduating to more critical or sensitive topics.

For more on this topic, see Amaresh Tripathy’s blog on Information & Decisions