Today, firms that want to achieve a competitive edge must foster a culture built on analytics. Research from Erik Brynjolfsson et al. at the MIT Sloan School of Management found that data-driven organizations have five to six percent higher output and productivity than their less data-driven counterparts.
Creating an analytics-based culture can be a big undertaking. But you can start small and expand to turn valuable insights into revenue generating opportunities. While it can be difficult to know where to start, here are three steps to consider:
- Identify the problems your firm is looking to solve.
- Teach leaders to adopt a rational, data-driven mindset.
- Implement technology that fits the workflow.
Identify the Problems the Firm Is Looking to Solve
Albert Einstein once said, “If I were given one hour to save the planet, I would spend 59 minutes defining the problem and one minute resolving it.” Identifying the problem—the first crucial step in implementing a data strategy at any firm—is often overlooked. It’s one thing for everyone to be on the same page about the importance of analytics. It’s another thing for everyone to agree on the specific problems the company is trying to answer with data. These two are not the same, but both are necessary to building an analytically driven culture.
At this initial stage, it’s important for leaders within the firm to articulate the problems in the simplest form. For example, to increase revenue, a firm might identify advisors with high numbers of assets held away. The firm can ask these advisors to work to bring those assets under management to grow revenue. By framing the problem this way, firms can identify the need, the results, and the key metrics.
Teach Leaders to Adopt a Rational, Data-driven Mindset
Data permeates and provides insight into all aspects of an organization. But making use of it requires leaders to adopt a data-driven mindset rather than relying on subjective instincts. The best approach to building an effective data strategy is for leadership to define expectations and create the vision across the entire firm—including a clear understanding of what the firm hopes to achieve and how success will be measured. Before initiating a strategy, ask: Is the goal to understand where there are opportunities to grow? Are there areas where advisors could perform better? Where are assets held away? Data can only take an organization so far; the real drivers are the people who make use of it.
Implement the Right Technology to Achieve Your Goals
Data sources within an organization can appear patchwork. Data may be siloed across disparate sources and follow different schemas. To gain actionable insights, firms need an analytics solution that standardizes the data and offers dashboards that present users with relevant information. When evaluating an analytics solution, you should look for one that:
- Integrates easily into your existing workflow.
- Centralizes data in a single location.
- Automates data entry and analysis, so you can spend more time acting on the insights.
- Answers questions your firm is looking to answer.
- Exports data for more custom analysis.
While you can’t create a data-driven culture overnight, these three simple steps can help you start building an organization in which data informs decision-making and helps solve your most critical challenges.