How Senior Leaders Use Data-Driven Decision Making to Increase Profitability
Organizations of all sizes benefit from strategic decision making that allows them to improve operations and stay competitive in their industries. In a world of rapid technological advancement—where businesses and consumers have immediate access to vast amounts of information—it is important for senior leaders to determine which kinds of data are useful and how they can be applied to an organization’s decision-making process in order to drive results and increase profitability.
What Is Data-Driven Decision Making?
Data-driven decision making is a strategy used by senior leaders to analyze information and gain insight into which areas of a business need improvement. While the widespread adoption of technology, digital processes, social media and other modes of information transference have resulted in a wealth of data for analysis, collecting and analyzing these complex sets of information in order to leverage strategic data-driven insights can be challenging. However, when utilized effectively, data-driven results can be analyzed and implemented to reduce costs and increase efficiency. Such methods include analyzing consumer behaviors and responses to target marketing; anticipating the risks of entering new markets; reducing unnecessary steps in the manufacturing process; improving employee performance; and using real-time insights to take advantage of buying trends and industry opportunities.
Making Strategic Data-Driven Decisions in an Organization
Implementing data-driven strategies can be a complex process, one that requires a significant investment of time and resources to develop data-driven methods that fit a business’ specific needs. The following steps can assist senior leaders in organizing and utilizing data for strategic decisions.
Develop a Strategy
Businesses opting to take advantage of the data available to them need to have a set plan in place in order to fully utilize the results of data analytics. Senior leaders will find it beneficial to plot out their strategies beforehand by determining what they hope to achieve through data-driven decision making. Identifying which areas of the business can benefit most from this type of strategy also helps senior leaders focus their energy where improvements are needed most.
Determine Data Needs for Improving Business
After determining which areas of the business could stand to improve from data-driven decision making, senior leaders need to decide which specific questions need to be answered in order to make these improvements. For example, businesses may want to define which marketing strategy works best with target audiences or determine why a certain group of consumers purchases a specific product. Once these factors have been identified, senior leaders will have a clearer idea of what data they need to gather in order to answer lingering questions. This promotes an understanding of which types of data are most valuable to the company in the pursuit of achieving its objectives.
Figure Out How Much Investment Is Needed
Once a strategy is developed, senior leaders need to assess the necessary investments that must be made in order to achieve their data-driven goals. Implementing a data-based strategy can require a significant financial investment, and senior leaders must be able to present the need and explain the potential benefits of this new strategy to stakeholders in order to secure capital. As part of their data-driven decision making, senior leaders should weigh the costs and benefits of implementing a new data-driven method to ensure it is viable when it comes to the needs of an organization.
Evaluate Insights and Make Decisions
Once senior leaders have secured capital and are ready to begin translating the results of data analytics into organizational action, the first step is to assign roles to employees and establish a process for gathering data. Upon collection, data can be analyzed with respect to a variety of evidential factors, including text, audio, video or still images. Using the resulting analytics, senior leaders begin to create more efficient business practices that will help increase the overall profitability of their organization. In addition to evaluating insights that guide the decision making process, senior leaders should review the processes by which data is gathered and analyzed to gain a greater understanding of how certain tactics worked while others failed, allowing them to make the necessary adjustments for future data-driven endeavors.
How a Master of Science in Executive Leadership Helps to Expand the Comprehension of Data-Driven Decision Making
Earning a Master of Science in Executive Leadership degree provides senior leaders with a unique opportunity to enhance their effectiveness by focusing on the theory and application of value-based leadership and strategic decision making. These individuals can build confidence and bolster their aptitude for leading complex change initiatives, utilizing innovative technology, and providing organizations with powerful insight that can help give them a competitive advantage. By understanding how to leverage data and technology for decision making, senior leaders can take their career to the next level.
Streamlining business practices for increased efficiency, productivity and profitability are the main goals of a business. Whether senior leaders are navigating the operations of a start-up company as it enters the market, revitalizing a company on the verge of bankruptcy or evaluating data-driven decision-making processes already in place at organizations in good-to-decent public standing, the ability to recognize the analytical value of data is essential. Senior leaders equipped with strategic tactics for utilizing information technology and data can help keep their organizations at the forefront of innovative business practices and give them a competitive edge in the marketplace.
As the nation’s oldest private military college, Norwich University has been a leader in innovative education since 1819. Through its online programs, Norwich delivers relevant and applicable curricula that allow its students to make a positive impact on their places of work and their communities.
Norwich University’s online Master of Science in Executive Leadership program offers an advanced level of graduate-level coursework that is designed to help address the specific challenges senior leaders regularly face. The program focuses on providing tools for enhancing one’s ability to leverage human capacity for strategic results and accomplishes this by taking a four-dimensional approach to leadership, with an emphasis on leading the self, leading others, leading organizations and leading in service.