Our business is helping community banks and credit unions grow. A lot of that work involves data. Most often, it’s in the context of making decisions. We help institutions be more data-driven in how they make the big strategic and smaller, but no less consequential, day-to-day operational decisions. But one misconception we often confront is that being data-driven isn’t really about analytics, dashboards, or advanced ML driven models. It’s about change.
And being effective at change demands the ability to look closely at the things that aren’t working. A good analogy is a mirror. There are full-length mirrors, like the ones in clothing stores. The lighting is perfect. There’s cool music playing. Its whole job is to show you looking the absolute best you’re going to look in that outfit so that you’ll buy it feeling good about how you look.
Then there’s the concave bathroom mirror. These magnify and blow up your skin and show every imperfection. It’s unflattering. It’s not for the faint of heart.
An effective analytics program acts like the bathroom mirror. It points you in the direction of where you need to improve. When executed in the context of industry and best-in-class benchmarks, not just your own previous performance, it provides direction and gives an objective measure of how well you’re progressing (or not).
Not for the faint of heart either.
This is hard to do. Technically it can be difficult, but the skills and technology exist and are accessible. However, the culture and leadership to pull this off can be the biggest impediment. Does your organization make sport of shooting the messenger? Are major initiatives quickly forgotten, or have the goalposts moved so a meaningless victory can be claimed? Is the central role of “data” to bolster decisions that were already made or as a cudgel in office politics?
The key is developing a culture that focuses on learning. The focus is on finding what isn’t working and learning as much as possible. Using data and analytics to help accelerate that process, shorting cycle times.
This virtuous cycle creates unstoppable momentum. During the peak of their growth rates Google, Facebook, Amazon, Uber, Venmo, and even the Yellow Pages in their time all leveraged this concept.
Data-driven means being driven to change.