How to Lead a Data-Driven Strategy for Your Organization

Last Updated November 22, 2021

Business-altering change can happen in an instance and catch organizations and their leaders unaware and unprepared to respond. In truth, response or contingency plans should be the bare minimum in every organization. These are reactive. Innovative leaders are proactive, acting before change disrupts their organizations.

These leaders stay abreast of the constant streams of information flowing into their organizations and apply data analysis to optimize business performance today and identify opportunities for the future. Their strategy for success is a data-driven strategy—and it is as much about developing and leading the strategy as it is about the data.

“The most effective approach…starts not with the data, but with identifying a business opportunity and determining how the model can improve performance,” write Dominic Barton and David Court for McKinsey.

How can you lead your organization, teams and employees with a data-driven strategy? Here are four steps to guide you:

1. Recognize Change Drivers and Prepare for Disruption

Heraclitus of Ephesus famously expressed the concept of Panta Rhei—that “everythingchanges,” or “life is flux.” Change is a constant, it is predictable and it has affected people through the ages. It is also accelerating. The continuous innovation and adaption cycles, which are mainly driven by technology, are becoming shorter and shorter.

The different forces that positively (and negatively) influence your business are the Drivers, and if they force an organization to rethink its strategic direction, they’re called Disruptors. Disruptive change has the greatest potential to either propel an organization forward or destroy it altogether.

Not all change is equal, so you need to recognize the different types of change impacting your organization and industry as a whole. Proactive analysis of your organization and the market can help you get ahead of disruptive change and determine which drivers and disruptors are most deserving of your attention.

Strategic analysis to conduct can include:

External environmental analysis: Look at the big picture outside your organization to help predict which external drivers are going to directly impact your business.
Competitor analysis: Know which drivers are impacting organizations similar to yours and develop a strategy that aligns with competitive forces and changing industry conditions.
Product lifecycle mapping: This will help you get a sense of which products will be most affected by external drivers and inform the needed product strategy—improve your products within existing markets, launch new products in existing markets, or move to new markets altogether.
Scenario planning: This is a method for describing possible outcomes resulting from a specific situation, such as a changing geopolitical climate, currency fluctuations, and advancements in technology.
Kotter’s Strategic Model: This eight-step model can help you prepare for impending change and chart your change journey, including employee involvement for success.

Conducting these various analyses will provide you with valuable insights to develop the needed techniques and strategies to leverage change for your organization and enable transformation.

2. Use Your Analytics to Your Advantage

The combination of accelerating change and potential disruption has led many organizations to adopt a proactive approach in which predictive analytics have become central to the planning, performance and competitive advantage of the organization. This is why making sense of all the internal and external information available and applying it to your strategy formulation is critical. The findings from your various analyses can provide baselines of information and point you in the direction for the types of data to gather.

Many organizations look to data analytics managers, data scientists and analysts to process, gather, clean and visualize this raw data, converting the information into insights for organizational leaders. This includes looking at historical data analysis of past performance and why it happened, but also using it to predict future performance and continuously refine strategies to optimize and stay ahead of change drivers, disruptors and the competition.

The types of data these experts work with to gain these insights can vary by organization—from analyzing e-commerce data to gain deeper knowledge on customer experience and purchasing patterns to trends data harvested using keyword searches in blog posts and social media to using algorithms to track industry and market trends that can then forecast External Drivers.

Data-driven insights can be applied and leveraged throughout every facet of your organization, including:

Determining KPIs for value chain creation
Enhancing marketing and sales performance
Setting values within enterprise functions of risk management, human resources and the supply chain
Identifying and defining organizational problems and opportunities

3. Develop a Strategic Model

Conducting analysis—both of your organization to recognize drivers and disruptors and of your data information to apply and leverage it to your advantage—informs your strategy development.

Every business is different, and your strategic model will be unique to your organization, with best practices in mind. The most effective organizations are strategically aligned through three layers: strategy, goals and objectives.

Aligning your organization from top to bottom across departments can be achieved by:

Aligning strategy to internal and external drivers: The findings from your earlier analysis can help you align your organization with the needed strategy and inform goals and objectives.
Aligning employees, teams and departments to the strategy: Develop a strategy plan that breaks goals and objectives down to the department, team and then individual level so employees understand how they fit within the strategy and what their roles and responsibilities are.
Setting action plans: Organizational leadership—team leads, managers, department heads—should collaborate on action plans for their respective teams and individual members towards achieving the goals. SMART goal setting allows for progress tracking and measurable outcomes.
Measuring your progress: Your strategic plan should define and measure your business goals and target areas of opportunity, both within and outside the organization. Creating a strategic planning template for your organization can help you to track and measure your progress towards your goals.

4. Step Up as a Transformational and Visionary Leader

Change drivers and disruptors may be the sparks of action, but it’s leadership that initiates strategy formulation and guides the organization through transformation.

The rate of change is only getting faster, but it can be harnessed as a tool for growth and development. Depending on organizational culture and processes, the adoption of a data-driven strategy can be a change in and of itself.

“Using big data requires thoughtful organizational change,” write Barton and Court. When “new approaches either don’t align with how companies actually arrive at decisions or fail to provide a clear blueprint for realizing business goals…problems often arise because of a mismatch between an organization’s existing culture and capabilities and emerging tactics to exploit analytics successfully.”

A transformational and visionary leader can lead others to embrace change and help them to see the vision of the strategy, where it can take the business and their role in taking it there. You can confidently drive your organization forward with your data-driven strategy when you:

Create strong mission, vision, purpose and goals for organizational transformation
Overcome resistance and get buy-in for change by coaching employees and empowering teams (i.e., provide analytics overviews so employees gain knowledge and understand how data is helping them)
Emphasize open communication and transparency (i.e., breakdown silos between data scientists/analyst and business managers and their teams)
Institute agile thinking and establish agile processes
Effectively lead and manage the strategy execution

This data-informed strategy development can build resiliency, agility and infuse innovative thinking within your organization to capitalize on change, rather than be disrupted by it.