Anyone who works in human resources knows just how important corporate culture is. A strong culture attracts and retains better talent, influences goals, and distinguishes your brand from competitors. While there is no “right” corporate culture, not all are created equal. They can be an organization’s strongest asset, or their biggest liability.

With the rising interest and emphasis on data, many companies are looking into the merits of making analytics a priority for not just their data analysts, but all employees. They are looking to foster a data-driven corporate culture. A potential problem with this, however, is that decision makers aren’t taking the time to think about the advantages and disadvantages.

Sure, data can be a great resource for making better informed decisions, but data can also cause problems if used incorrectly. In this post, we’ve outlined the three major pros and cons associated with developing a data-driven corporate culture to help you make the best decision for your employees.

Pros

1.     Prevents errors and biases

Making decisions based off intuition alone can lead to unnecessary errors. That’s why you shouldn’t just rely on your instincts when other information is available. If you have access to the right data, you can (and should) use that data to carve a path towards better and smarter decisions.

For example, HR teams who solely rely on their gut in the recruitment process may be influenced by subconscious biases. This can lead to costly hiring mistakes. By using data to support human judgment and intuition, HR departments are more likely to find the right fit. In fact, studies show that companies that make data-based workplace decisions have measurably better talent outcomes than those that don’t.

2.     Increases productivity

Workplace productivity is in crisis mode. In fact, about 75 percent of employers say that their team spends more than two hours of each work day is spent being unproductive. It doesn’t take an analyst to realize this has an enormous financial impact!

When the entire company has access to and utility of the key metrics that matter, data becomes a motivational tool for both teams and individuals. When employees can see how their actions affect the larger goals of the organization, they are more likely to feel connected to the overall efforts. This, in turn, encourages accountability throughout your organization in a way that won’t feel personal or punitive.

3.     Promotes transparency and understanding

Providing everyone within an organization (and not just the data analysts) access to data promotes transparency. Data sharing sends a message to stakeholders, customers, and employees that you are committed to a culture of informing your employees and increasing data engagement.

When data is accessible for everyone, individual employees also have the opportunity to increase their understanding of that data. This can open to the door to new insights from all levels of the organization, as people come to understand how metrics are composed and how efforts drive results. Team members can even leverage data to identify problem areas, and devise a game plan for how to make the necessary improvements.

Cons

1.     Elicits blind trust

A data-driven corporate culture can lead employees to overly doubt their own judgement and experience. Believing that something must be true just because the data says so, without any further investigation or thought, can be very harmful.

During data analysis, it’s important to keep some healthy skepticism around numbers that seem too good to be true, or conversely catastrophic. If something looks off, that’s a good sign that it might be. When looking at your data, you want to ensure that everything aligns and nothing is out of the bounds of logic. Mistakes happen, and data isn’t exempt from it.

2.     Leads to possible misinterpretations

Data doesn’t lie, but it can mislead when it doesn’t show the complete story. If you don’t have the full context, you could make inaccurate decisions based off assumptions. You could end up drawing simplistic conclusions from complex scenarios, such as crediting a single initiative with an increase in sales, when many factors may have influenced the spike. Instead of making future decisions based on the data, you are using it to support a decision you already made.

Being able to properly interpret and analyze data is a skill that takes time to master. However, it is crucial if you want your data to reach its full potential. Data visualization software is a helpful tool for quickly recognizing connections, trends, and correlations in your data. It brings the most important information to the user’s immediate attention, so even those who are unexperienced with using data can more accurately interpret the meaning behind it.

3.     May be low quality data

Your insights are only as reliable as the data they are based upon. There are several factors that can lead to poor quality data, from human data entry errors to gaps from third-party tools. In fact, recent research from Gartner found that organizations believe poor data quality is responsible for an average of $15 million per year in losses.

That’s why appointing a data steward is so important. It is this individual’s duty to identify trustworthy data sources and maintain data quality and integrity. A lot is at stake if you make important decisions based off low-quality information. When you rely on bad data, bad things happen.

The Bottom Line

You’re probably wondering, do the pros outweigh the cons? The smart money says yes. Just be wary: those who try to use fast and cheap shortcuts may find themselves mired in the cons without enjoying any of the pros! Creating a data-driven corporate culture is not easy, but planning and patience with the process pays off dividends.

It’s a process to get to the point where data can accurately and effectively inform decisions. If your organization is serious about making data a priority, it’s vital to communicate metrics effectively and understand the limitations of relying on the numbers too much. Never forget that you can’t rely on data alone. You need the right people to take your organization where you want it to go.