The key to any strategy is making sure it’s working the way you intended, and the same goes for your data strategy. That’s why identifying the right data metrics is a make-or-break exercise for your data strategy. With an emphasis on key metrics – generally speaking, you don’t need more than a handful (or two) that clearly indicate performance in line with your overall business strategy. Any more than that you risk losing your results in the noise.
As for what these data metrics will look like, well, whatever you choose needs to be aligned with your overall goals and business objectives. The right metrics can determine how well your organisation is performing against your current strategy, and inform future plans. The right mix of lead and lag indicators is also vital. This allows you to assess what’s happened (through lag indicators) and also gives you the ability to influence the future based on what could happen (through lead indicators). You may choose to have the end business result as the key metrics (e.g. improving customer satisfaction or increasing revenue) or it could be about the progress of your data projects (e.g. the number of data sources ingested or unused dashboards decommissioned.)
In terms of your data strategy itself, there are some simple steps you can carry out to work out the best metrics for your organisation.
It can be tricky to initially obtain ‘hard’ results that can be easily quantified when starting out with a new data strategy. It’s likely you are focussing on establishing the agenda and getting started. Often, the first metrics you’re likely to encounter are more ‘soft’ benefits like increased knowledge and team agility.
As your data projects mature, increasing team skills is likely to be one of the first metrics that you should track. Having your team develop the skills to master more data projects is a major step towards achieving your future plans. It will also drive internal productivity and deliver the hard results you will later need.
Another metric to measure is the quality of the business decisions that you make, based on your data project insights. For a retailer, measuring resulting supply chain efficiencies and inventory costs can be an indicator of ‘better’ decision making. For example, a venue might measure its revenue and visitor numbers.
Using data can majorly increase decision making speed – so measuring this can be another clear indicator of data strategy success.
Once you’ve decided on your metrics, it’s crucial that those measures are cascaded across your organisation. This is so everyone understands what’s being measured, why it’s important, and what success looks like. In this way, all the individuals in an organisation can be marching towards the same goal.
Communicating the impact of different data projects to your wider team can vastly increase buy-in for future initiatives. When you have some good results to report, therefore, make sure you spread the word across your entire company.
As part of this, you will have to figure out the right cadence of review meetings where you can receive feedback on current and planned data projects. The set agenda and people involved in these meetings are also important. You can also use these meetings to check that your chosen key metrics are working well for your team and that they clearly indicate your data strategy’s performance. It’s vital to only focus on the things that are out of whack within these meetings and to have consistent and regular reviews.
Your data strategy will evolve over time in response to external challenges and changing business objectives. As it does so, I recommend reviewing your key data metrics, to ensure you’re getting the best insights, and that they are still relevant. As you gather results from your key metrics, you might discover that an element of your data strategy isn’t going according to plan – so you edit it accordingly.
Likewise, positive results from your key metrics can help you gain buy-in for further projects and extend your data strategy.
The success of your data strategy depends on having the right measures in place, and can benefit your entire organisation in several ways:
There are a few steps you should take in selecting your data strategy metrics to ensure they’re the best for your organisation.
When it comes to your data strategy, your metrics are just as important as the execution of the strategy itself. Without the right metrics, you’ll never know if your data strategy is going the right way.
Make sure to download our Data Strategy whitepaper for more insights into building a data strategy.
Jason Foster, Cynozure Founder & CEO, named Entrepreneur of the Year at The Allica Bank Great British Entrepreneur Awards for the Services Industries in London
Cynozure named as the 14th fastest growing company on London’s 2023 Fast Growth 50 Index
Jason Foster, Cynozure’s Founder & CEO, recognised as One to Watch in The LDC Top 50 Most Ambitious Business Leaders for 2023