The role of data literacy in building a data-driven culture

The mention of a data-driven culture has people nodding in agreement, wishful thinking, or triggering skepticism about its practicality.

As companies turn to advanced AI and data solutions to gain valuable insights, optimize processes, and boost ROI, data literacy within companies has become more necessary.

While leaders appreciate meaningful insights, most employees are not properly equipped with the skills to understand, analyze, and use data.

Unlocking data's value takes more than tools—it requires a team capable of understanding and analyzing it. Data literacy equips your workforce with these essential skills.

But are teams ready to embrace this data-centric approach? And do leaders fully grasp why data literacy matters so much?

Data has never been the end goal. Data is an asset meant to drive innovation and be treated like currency, traded in exchange for value. Shifting to a data-driven culture requires both a mindset change and the development of new skills.

Let's begin by unpacking the concept of data literacy.

Data literacy is the ability to read, understand, create, and communicate data as information.

It goes beyond mere technical skills; it's about developing a data-driven mindset that ties into all aspects of decision-making and problem-solving within an organization.

With constantly changing market dynamics, increasing competition, AI, and evolving customer consumption patterns, it's becoming more difficult to make strategic decisions without making data work for you.

Naturally, this raises a question: What makes data literacy different from data science?

Data literacy differs from data science in its scope and depth. While data science involves advanced technical skills in statistical analysis, machine learning, and programming, data literacy is a foundational skill set accessible to all employees. It's about empowering everyone in the organization to work effectively with data, not just specialized data professionals.

Though independent, they form a powerful combination.

Culture often manifests in phrases like, "that's (not) how we do things around here." It's built over time, with each employee embodying it, interaction after interaction, process by process, tool by tool.

Building a data-driven culture is no different and relies on factors such as trusting data, feeling confident about using it, and having the right tools. At the core of a data-driven culture are shared values and beliefs around the power of data to drive decision-making, a willingness to challenge assumptions based on data, and a commitment to use it responsibly. These shared values help to create a common language and framework for thinking about data across the organization.

“Data should not drive culture; values should drive culture, and data should be used to support values. Everyone needs to be data literate, otherwise data can be twisted, or naively misused, to drive bad decisions. Data can be extremely valuable, but only if decision-makers know how to use it wisely. ”

- Catherine Brockway, Senior Sustainability Analyst at UN CIFAL Honolulu

According to Gartner, poor data literacy is one of the top six roadblocks businesses face in the success of Data & Analytics initiatives.

Gartner

But how exactly does data literacy influence building a data-driven culture?

# Data literacy helps to ask the right strategic questions of the data

Once your team understands the data and sees its value, they can ask the right questions to get the most out of it. This critical thinking approach ensures that data collection and analysis align with strategic business objectives. For example, a marketing team with strong data literacy might ask, "How do our customer engagement metrics correlate with long-term retention rates?” It makes embedding data into everyday workflows easier.

# Data literacy allows to turn data into smart business moves

Numbers can be impressive, but unless they inform decisions that positively impact the company's future, they quickly get buried under a mountain of fresh data. When employees at all levels are empowered to use data to inform their decisions, the quality of those decisions improves. A study by The Data Literacy Project found that enterprises with higher corporate data literacy scores can have $320-$534 million in higher enterprise value. Data-driven decision-making helps organizations identify new opportunities, optimize processes, and respond quickly to changing market conditions.

# Data literacy gets data teams and business units working together

Data can be a catalyst for better communication and collaboration around insights or a source of frustration if handled poorly. When teams share a common understanding of data's potential, they see it as a win-win situation. To achieve this, organizations need effective change management and a dedicated champion to bridge the gap between data teams and business units, ensuring the value of data is communicated clearly and consistently until it gains widespread acceptance.

# Data literacy makes data everyone's business

A truly data-literate team operates collaboratively, with each member taking responsibility for seeking out data, using it effectively, and sharing how it informs their decisions and next steps. This collective approach ensures that data becomes a shared responsibility and an integral part of everyday work.

“In our company, we emphasize the importance of data literacy in making informed decisions, driving innovation, and ensuring efficiency. To us it's about creating a mindset where employees can use data as not just a tool but a core asset that helps inform various aspects of our operations and decision-making processes.”

- German Botello, Global Site Personalization Lead at Bose Corporation

A data-literate organization is a journey in the making. It requires a multifaceted approach that handles both the technical and human aspects of data usage. These components below can help build data literacy in your team.

1. Ensure leadership commitment to championing a data-driven mindset

Building a data-driven culture requires sustained investment and commitment from leadership. Leaders are expected to start conversations around data, be willing to invest in data infrastructure and talent, and lead by example in using data to drive business value.

When leaders demonstrate and communicate the value of data-driven decision-making through their actions, it sends a powerful message to employees that this is a priority for the company. Another effective way to promote a data-driven mindset is to identify data literacy champions within the organization, as they can advocate for data literacy and help drive adoption. Leveraging external expertise, such as the services offered by Visium, can also help leaders effectively champion a data-driven mindset.

“This capability and comfort with data of the workforce isn’t going to develop organically, so if you ignore it and don’t apply direct interventions, it won’t happen out of its own. You need deliberate attention to it. Leaders are some of the strongest teachers of the organization. If you have a leader who’s always going into a meeting with a 40 page powerpoint deck and turns to page 27 and will reference this, that is different from a leader who will pull up a live dashboard or visualization in the meeting and say, “hey let’s talk through this.”

- Valerie Logan, CEO and Founder of The Data Lodge

2. Measure and level up data literacy skills

Assessing current data literacy levels starts with surveys and assessments to identify skill gaps in data collection, analysis, visualization, and data storytelling across roles and departments. It can also include evaluating existing data tools and processes to find areas where data workflows can be improved and ensure employees can access the right tools.

Overall, companies find that improving data literacy revolves around Jordan Morrow's three Cs: confidence, competence, and curiosity.

Creating a safe space for employees to learn and grow their data skills helps them better understand how to apply data literacy skills in their actual work environment. It can involve offering in-house training programs tailored to individual roles and responsibilities, mentorship opportunities, and peer-to-peer learning. Encouraging curiosity and experimentation with data is also a powerful way to overcome resistance to change and build momentum.

3. Allow widespread access to data and analytics tools

It takes constant exposure to data and data tools to become data literate. Make sure teams have access to the technology they need to become more data-driven in their work. It's tough to expect teams to use data effectively if it's locked away in silos, stuck with outdated systems, or available to only a few people. At the same time, poor data quality and lack of governance can undermine even the most well-intentioned data literacy initiatives. Establishing clear data governance policies, data management procedures, and user-friendly tools can ensure the integrity and reliability of data used in decision-making.

A data-driven culture thrives on breaking down silos between departments and functions and encouraging teams to work together to discuss and solve business problems using data. Creating forums and platforms for employees to share data insights and best practices is also part of it.

4. Inspire a culture of data exploration and strategic experimentation

Building a culture of data exploration and strategic experimentation drives true data-driven success.

It encourages employees to engage with data, ask probing questions, and test hypotheses. Netflix is an excellent example of this approach. The company uses extensive A/B testing and data analysis to drive decisions on everything from user interface design to content production. Their culture empowers employees to explore user behavior data, leading to innovations like their famous recommendation algorithm and successful original content strategy.

With a curiosity-driven mindset, organizations can use data creatively, sparking conversations that challenge assumptions, drive innovation, and map the right path for competitive advantage.

“Hire people who are curious, someone who is really going to be exploratory with data, who’s going to look at it and think “What is this really telling me? Who can apply it to a business context?”

- Wendy Batchelder, Salesforce SVP & Chief Data Officer of Trust

Data literacy is a strategic enabler in building a data-driven culture. It gives everyone a common language and understanding of data, instilling a sense of ownership and accountability.

And it's almost like building a habit.

"Early attempts are easy to dismiss because they don't seem to amount to much. But you have to do the low stakes stuff to prepare for the high stakes stuff. They are the building blocks of confidence, and that's an enormous thing."

- James Clear, Author of Atomic Habits

As you embark on or continue your data literacy journey, remember that it's not about turning everyone into data scientists. The goal is to equip your workforce with the skills and confidence they need to work with data effectively in their roles. It's about creating a culture where data isn't just a buzzword but a fundamental part of how your organization thinks and operates.

The path to data literacy may seem intimidating, but the rewards are well worth the effort. Organizations that thrive will take concrete steps to cultivate it, from securing leadership buy-in to implementing training programs and creating a supportive data infrastructure.

Will your organization be among them?