Tackling the corporate data literacy shortfall in 2019
- Research indicates that corporate data literacy can add quite considerably to organisational value. But while most employers recognise this situation, all too few seem prepared to do anything about it.
According to the Massachusetts Institute of Technology, data literacy, at an individual level at least, is the “ability to read work with, analyse and argue” with information. But the Data Literacy Project (DLP), which was set up in October this year, has now supplemented and broadened out this definition to cover what it calls “corporate data literacy”.
In addition to developing skills at the individual level, corporate data literacy also involves making it possible for employees to access data from across the organisation, wherever it is held. It likewise entails creating suitable processes to support data-driven decision-making. Jordan Morrow, global head of data literacy at data visualisation and analytics tool company, Qlik, which initiated the formation of the DLP, explains:
The outcome for businesses is that employees are able to make more informed decisions at every level, whether that’s managing hospital beds or informing product design. With the right consumable information at their fingertips, organisations can make better decisions based on insight and experience rather than instinct.
While this so-called “democratisation of data” has been promised to limited success since the 1990s when personal business intelligence tools first appeared on the market, the dynamics are apparently different now. This is due to the sheer amount of data that is being generated by everything from social media to Internet of Things-based devices as well as the growing adoption of technology such as machine learning to exploit it. The fact that entire industries are being shaken up by online ‘digital disrupters’ is also serving to focus minds and push leaders to look for alternative ways of doing things.
But levels of corporate data literacy today vary considerably. Lorin Hitt, Professor of operations, information and decisions at the Wharton Business School at the University of Pennsylvania, explains:
There’s a lot of variation, but organisations at the top of the scale, such as tech, financial services or service occupations such as consulting, have historically tended to be more data-intensive and have dealt with large-scale customer data for a long time. If companies start off by being data-driven, it gives them an advantage, but there are still big variations across and within industries.
Becoming data literate
In terms of maturity at a regional level, meanwhile, the DLP’s Data Literacy Index indicates that, while Europe is ahead of the pack, with the UK (median score: 81.3), Germany (median score: 79) and France (median score: 77.3) among the most advanced, levels in the US and Asia-Pacific are roughly the same. Interestingly though, Singapore is not only the standout performer in its region, but also the most data literate nation in the developed world (median score: 84.1).
Another important finding is that organisations ranked in the top third of the Index generally experience a 3% to 5% higher market capitalisation rate, the equivalent of about $320 and $534 million better than their peers (the average participant was valued at around $10.7 billion).
But perhaps most significantly of all, the Index also revealed a clear disconnect between employers’ declarations of how important they believed staff data literacy to be (93%) and their willingness to do anything about it – in fact, a mere 63% said they planned to boost the number of employees who were skilled in this area.
To make matters worse, only just over a third currently provide their workforce with pertinent training, while a mere 17% acknowledge making any significant efforts to ensure employees are more comfortable with using data. But even if business leaders do make any attempt to do anything about the situation, just 36% indicate they are prepared to pay data literate workers a higher salary anyway.
Unsurprisingly then, only 8% of the employers questioned have made any major changes in the way they have used data over the last five years. As to why this unfortunate situation is occurring, Paul Malyon, Data Strategy Manager at Experian, believes that:
Unless there’s a Chief Data Officer to drive a data agenda, most board members are not focused on it. A lot of organisations also recruit analysts and data scientists but create centres of excellence rather than truly democratise data. It’s a long-term process.
Qlik’s Morrow agrees that, while there is “a hunger from employees to upskill”, successful programmes are typically mandated from the top. But the problem here is that:
Frequently the leadership team itself lacks the necessary data skills to kick-start analytics initiatives – indeed, less than a quarter of business decision-makers are fully confident in their ability to read, work with, analyse and argue with data. To see procedural change towards a data-driven culture and catalyse a greater appreciation for data skills, management must first improve their own understanding of how data can be used throughout the organisation and become its champion.
Camden Council’s journey
One organisation that has been working hard to do just that is Camden Council in London. It initially started its data programme in 2012 by introducing various proof-of-concept projects to obtain leadership buy-in. The next phase, under the guise of the Council’s ‘Medium-Term Financial Strategy’, was to introduce a ‘Resident Index’ based on master data and 65 separate dashboards based on QlikView and Qlik Sense analytics software.
The aim here was to start moving towards a more collaborative, ‘joined-up government’ approach by enabling staff and managers to access and evaluate data aggregated from a range of sources in order to obtain a rounded view of the public authority’s operations and service users’ needs. This move helped to save it £63 million between 2014 and 2017.
But the Council is now working under the auspices of a new, seven-year Camden Plan, one of the key foundations of which is to become more data-driven, both internally and on a borough-wide basis. In the latter instance, the aim is not only to invest in data education at the school curriculum level. It is also to create suitable infrastructure, which includes high-speed broadband, to encourage data-driven businesses to set up shop in the area.
Internally, meanwhile, a key goal is to train staff at all levels to exploit data to the full. Sudip Trivedi, head of data analytics and connectivity at Camden explains:
We’ve put the technology in place and we’ve been looking at skills levels, but we need to up it. Some people really understand and derive value from what we’ve done so far, but for others, it’s all just gobbledegook, so we need to make things as easy as possible to ensure everyone can benefit. That involves creating an environment where the data is helping and enabling people and they can also see the value in it – in other words, they have to see why data literacy is important to them.
The ultimate aim is to transform Camden from taking a budget-driven approach to becoming outcome-driven. As Trivedi concludes:
When our CEO Mike Cooke talks about how we want to operate in future, he highlights the use of evidence to shape outcomes, or key performance indicators, or services. It’s very powerful when you begin to think about that as part of provisioning public services. Because if you can look at services in a joined up way and you can see, for example, what support families need, you can also start to get into the territory of informing outcomes more effectively.
While the advantages of improving corporate data literacy are clear at both an organisational and macro-economic level, what is not so clear is what will motivate employers - with one or two notable exceptions - to do something about it? On the one hand, there has been absolutely no shift over the last five years in how the vast majority use data, despite the huge amount of workplace, management and societal change we have all experienced.
On the other, many organisations have been unprepared to invest in basic skills, including regular literacy and numeracy, for years, despite ongoing complaints about inadequate educational levels and the huge benefits they could derive from doing so. So my question is: just what will it take? I’d be fascinated to know.