How do modern organisations use data

We all know how fixated organisations can become on data and reporting. And while data does help us gather exceptional insights, you might be surprised to discover why data only matters so much. The fact is that employee engagement and organisational health can be the real secret to your successes.

This poses the question; How do modern organisations use data?

 

There are many reasons that modern organisations are preoccupied with data. As we have covered in many previous blogs, data is a valuable resource the main purpose is to provide insights into customer behaviour, market trends and operational efficiency. By analysing data, organisations can make more informed decisions, improve performance and gain a competitive edge in their industry.

Many modern organisations are fixated on their data. With big data technologies, organisations can collect vast amounts of structured and unstructured data from diverse sources, ranging from social media interactions to transactional data. Why do we all get so darn obsessed with this data?

Pantometry is a term that was first used in the 1600s, to describe the very human trait of counting everything we can. From sheep in the fields, to the types and weight of herbs and spices, our entire trade systems have been based on the numbers. Pantometry literally means “the measurement and analysis of everything”, being derived from the Greek words "pan," meaning all or every, and "metry," meaning measurement.

In practical terms in today’s world, it refers to the comprehensive collection and analysis of a wide range of data points to gain insights into various phenomena or systems.

And while traders in the middle ages used their stock and supply numbers to get their business ahead, today’s enterprise organisations practice pantometry by gathering complex data sets, which might not do more than take up space, and which are too complex and too big to be able to be used for any real benefit.

It was Goethe who said “Things that matters most must never be at the mercy of things that matter least. The first sign we don’t know what we are doing in an obsession with numbers”. While data can certainly make a difference, in this article we argue that it only matters so much.

 

 

The importance of culture

Patrick Lencioni, author of famous “The Five Dysfunctions of a Team” also published “The Advantage – Why Organisational Health Trumps Everything Else in Business” in 2012.

Lencioni begins his book by asserting that “The single greatest advantage any company can achieve is organisational health. Yet it is ignored by most leaders even though it is simple, free and available to anyone who wants it.” He goes on to say that organisational health is the single greatest determining factor in the success, or otherwise, of an organisation.

Smart vs healthy organisations

Lencioni differentiates between smart and healthy organisations. Smart organisations are focused on leveraging technology and data to improve efficiency, productivity and decision-making. They often prioritise innovation, digital transformation, and the use of advanced analytics to gain a competitive edge.

Smart organisations focus on:

• Strategy
• Marketing
• Finance
• Technology

And while there is nothing wrong with being smart, it also pays to be healthy. Healthy organisations are primarily concerned with promoting and maintaining the well-being of individuals and communities. They focus on providing employee services, conducting research and implementing initiatives to improve overall health outcomes. Healthy organisations focus on:

• Minimal politics
• Minimal confusion
• High degree of morale
• High degree of productivity
• Low staff turn over

While smart organisations prioritise technological advancements and data-driven strategies, healthy organisations priorise the physical, mental and emotional wellbeing of their people.

Organisational health is more important than intrinsic intelligence. While organisations can become smarter and more intelligent over time, as Lencioni says, people in heathy organisations, “learn from one another, identify critical issues and recover quickly from mistakes.”

And so, a balance between the two; smart and healthy is essential in modern enterprises.

What is sophistication bias?

Our obsession with data and figures can also cause us to focus on the wrong things. Lencioni describes “sophistication bias”, a phenomenon he identified in modern business and enterprise organisations, in which leaders and staff tend to overlook simple solutions for more complex ones. This bias can lead people to overlook straightforward and effective solutions in favour of something more complicated or elaborate. It can be important to recognise and address sophistication bias in decision-making processes to ensure that the best solutions are chosen, regardless of their perceived complexity.

Sophistication bias and technology

Sophistication bias can present in organisations where there is tendency to want to solve issues and challenges with technological solutions and software tools, because these technologies are seen as contemporary, cutting edge and innovative. Executives and leaders may think that data management, new tools and enhanced systems will solve all of their problems. And while in many cases, improved processes and tools may well make a positive difference, they will only do so much when organisational culture and health are poor.

It is often easier to overlook cultural challenges, and seek to acquire a new system to make work better or easier for your staff. Technology is often seen as a cure-all for organisations, even though in some cases these tools will not address the root cause of problems and inefficiencies.

What is quantification bias?

Lencioni also mentions “quantification bias” where there is a tendency to prioritise things that can be easily measured or quantified, while overlooking things that are difficult to measure. This bias can lead to an overemphasis on numerical data and metrics, potentially undervaluing important but less tangible factors. It's important to be mindful of quantification bias in decision-making to ensure that all relevant factors are considered, not just those that can be easily quantified.

Quantification bias and technology

It is easy to imagine how modern organisations might focus on data that is easily gathered and compared to measure their overall success. Sales data, customer ratings, conversion rates, response times, these are all easily tracked and quantifiable data sets. Organisations prefer quantifiable data because it provides measurable and objective information that can be used to make informed decisions.

Quantifiable data allows organisations to track progress, measure success, and identify trends, which can be crucial for setting goals, evaluating performance, and making strategic business decisions.

Quantifiable data is often more convincing and credible when presenting arguments or justifying actions within a modern business. Lencioni says “Organisational health permeates so many aspects of company that isolating any one variable and measuring its financial impact is almost impossible to do in a precise way.”

Organisational requirements for great data processes

Lencioni argues that once organisational health is properly understood and practiced, it will surpass all other disciplines and activities in business as the “greatest opportunity for improvement and competitive advantage”.

Most organisations only exploit a fraction of the knowledge, experience and intellectual capital that is present in their workplace and available to them to put to use in the business. Ideas for supporting people to effectively use data include

• Providing mentoring and coaching: to help feel supported to learn and grow in their roles more generally. This may relate to the use of data and information, but could be more general career coaching.
• Encouraging people to take pride in their work: many people describe being able to take pride in their work as important as their salary or wages. Measuring pride in the workplace may not be easy, but understanding its influence can leader to greater commitment and outcomes.
• Help each employee to create their own development plan, outlining their skills and goals: helping employees involves as self-assessment of their confidence in the use of software tools and applications. Where there are gaps, help people set a plan around what they will change or do differently.
• Discuss culture: regular cultural assessments and opportunity for reflection can help embed a culture of putting people first.

How to create organisational health

It’s wise to pay heed to Lencioni’s ideas. The cost of poor organisational health include:

• Wasted resources: Unhappy employees are likely to lack motivation and commitment, leading to inefficiencies in work processes and reduced overall productivity
• Inefficient time management: Poor time management in business can lead to a variety of problems, including missed deadlines, decreased productivity, increased stress, poor quality of work, and ultimately, loss of revenue. This in turn can also lead to a negative impact on team morale and work-life balance.
• Increased staff turnover: Unhappy employees will vote with their feet and are not likely to stick around in an organisation that feels unhealthy or unsafe.
• High customer attrition: also known as customer churn, this refers to the loss of customers or clients by a business. Poor customer attrition refers to a situation where a company is experiencing a high rate of customer defection, which can be detrimental to the business. It often indicates that customers are not satisfied with the product or service, leading them to discontinue their relationship with the company.

Lencioni outlines a “foolproof” four-discipline model to build a healthy organisation.

1. Build a cohesive leadership team: your leadership team is a small group of employees, empowered to drive your organisation and achieve your common objectives. Leaders must behave in a coordinated way to keep organisational health at front of mind. The must put the collective needs and priorities of the organisation ahead of their own drive for team excellence.
2. Create clarity: leaders must agree upon and be intellectually aligned, with Lencioni presenting six questions that can be used to a shared commitment. Leaders should also set a strategy that helps them design a strategy that helps them identify clear points of differentiation from competitors.
3. Overcommunicate clarity: Lencioni says that once a leadership team has established behavioural cohesion, and created clarity about key business ideas, they must then communicate these ideas to staff. “When it comes to reinforcing clarity, there is no such things as too much communication”. When asked, employees should be able to articulate the organisation’s values and goals.
4. Reinforce clarity: For an organisation’s long term health, leaders must establish a few critical systems which can be used to remind all employees about what is really seen as most important – the wellbeing of the people. There should be a simple and consistent process for setting and review goals.

Ultimately, a healthy culture and positive, encouraging and supportive work environment will create a workplace where people want to be. People arrive to healthy workplaces with clarity, enthusiasm, hope and a drive to contribute. They leave with a sense of accomplishment and pride.

How the right tool enables enterprise success

Tools and technologies that are intuitive, easy to use and which make sense to people are the most likely to be adopted and utilised in modern organisations. Employees are looking for roles that are supported by effective systems that enable efficient work. The right systems help staff to increase productivity, manage their time well and produce quality business outcomes.

Pimcore – the cohesive tool for enterprise businesses

Pimcore is an outstanding software solution uses by thousands of businesses worldwide. While Pimcore is predominantly a Digital Experience, Customer Relationship Management (CRM) and Product Information Management (PIM) tool, it also has great data tracking capabilities. The Pimcore Enterprise Edition has a seamless, intuitive interface, featuring new submenus and an easy to use and appealing interface. Pimcore Enterprise Edition also comes with Access to all Pimcore Enterprise Extensions such as the Pimcore Experience Portals, product data syndication, and many more.

The Pimcore Enterprise Edition 2023.2 introduces a new feature, enterprise data quality and compliance, designed to maintain exceptional data quality and regulatory compliance. This is crucial for making informed decisions, preserving brand integrity and building customer trust. This innovative solution focuses on strong data governance, effectively managing product information, master data, digital assets and customer data. Its transformative approach to ensuring data quality adapts to the complexities of today’s business environment, delivering real-time insights to enhance Pimcore's data management processes.

If your systems need an overhaul and you need a hand prioritising your data, then contact Stimulus. We can help you develop a cohesive technology stack that will take care of your data while you take care of your people.

 

 

 

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Related questions

What tools can measure organisational health?

Some organisation uses tools and technology to measure their organisational health. Performance management software tools are designed to help organisations monitor, manage, and improve employee performance. These tools often provide a way of measuring employee engagement, mood or perceptions and some offer analytics to help managers identify trends and areas for improvement within their teams.

According to G2, Performance Management software:

• facilitate the employee performance review process
• enable 360-degree feedback between managers, employees, and peers
• helps track goals for individual employees
• allow users to evaluate employee performance in relation to overarching company goals
• generates in-depth dashboards or reports from employee performance data
• retains historical performance review data or integrate with third-party applications where historical data can be maintained