Why Becoming a Data-Driven Organization Is So Hard

Why Becoming a Data-Driven Organization Is So Hard

Written by: Randy Bean   |   Publication: Harvard Business Review


For many years, companies have been working to become more data-driven, with mixed results. These efforts play out over time, but while the mission may remain steady, the particulars change. In fact, the biggest challenge for organizations working on their data strategy might not have to do with technology at all.

In the latest annual survey by NewVantage Partners, which tracks the progress of corporate data initiatives, company executives reported that cultural change is the most critical business imperative. It’s an understandable problem: To a degree that is perpetually underestimated, becoming data-driven encompasses the ability of people and organizations to adapt to change. Long-established companies are unlikely to change overnight, and their efforts to become data-driven can take a generation to succeed.


There are several cultural dynamics that have shaped those efforts.


First, the COVID-19 pandemic — and the disruptions it caused — raised awareness of the importance of data, science and facts. It’s become clear over the past two years that good data is essential to making informed, prudent and judicious business decisions.

Second, self-service is on the rise, and individuals now consume information and data when they want and however they want to. We live during a time of increasingly decentralized information, which means that consumers can select the news they follow, the social media they engage with and the data they choose to trust.

Finally, there’s a structural fact: The amount of data created each day continues to proliferate exponentially. With greater computing power, companies can now process massive quantities of data to generate a precise answer, rather than rely on representative data samples.

Understanding these trends, and how other companies are navigating them, can help companies make real progress toward data-driven decision-making.



There are three indicators of progress that stand out among the organizations surveyed. First, achieving data-driven leadership remains an aspiration for most organizations: Just 26% of respondents say they’ve successfully established a data-driven organization. Second, becoming data-driven requires an organizational focus on cultural change. The survey reveals that 91% of executives cite cultural obstacles as the greatest barrier to becoming data-driven. Lastly, organizations are creating a leadership role, such as a chief data and analytics officer, that seeks to provide the foundation for a data-driven organization. However, just 40% of companies report that the role is successful and well established within their organization.

It doesn’t help that the task of being data-driven keeps getting harder. Today, corporations encounter vast new volumes of data as well as new sources of data, and companies must come to recognize that data is a business asset that flows through an organization. It cuts across traditional organizational boundaries, often without clear ownership. The Data’s fluidity compounds the complexity of managing this asset in a way that consistently delivers business value.

Furthermore, a rapidly emerging concern among businesses today is the responsible and ethical use of data. The topic has been written about extensively in recent years by critics ranging from Cathy O’Neill, in her 2016 manifesto “Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy,” to Shoshana Zuboff, in her 2019 call to arms “The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power.” This year’s survey reflects deep concerns about data ethics and data responsibility: Only 21% of data leaders say they believe the industry has done enough to address data and AI ethics issues and standards.



Becoming a data-driven organization is an undertaking that can last years or even decades. What steps can organizations and business leaders take to accelerate these efforts?

1. THINK DIFFERENTLY. Data leaders recognize that becoming data-driven requires a different mindset. Organizations must be prepared to think differently. Analytic algorithms need to be matched by human judgment and critical thinking.

2. FAIL FAST, LEARN FASTER. Data leaders understand that individuals and organizations learn through experience, which often entails trial and error. It has been said that failure is a foundation of innovation. Companies that are prepared for faster iterative learning will gain insight and knowledge before their competitors.

3. FOCUS ON THE LONG TERM. Data leaders understand that data transformation takes time, and that perfection is rarely achievable. Data-driven companies recognize that success is achieved iteratively — it will grow and then spread — and they expect to be at this for a while.



To compete in this data-driven world, business leaders must learn from the experience of their predecessors. They must actively work to avoid the pitfalls of the past and benefit from the examples of companies that have pushed forward with success. Now more than ever, at a moment when data, science and facts have been challenged from many quarters, becoming a data-driven organization matters.

c.2022 Harvard Business School Publishing Corp.

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