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Even though business and technology leaders understand the importance of data for effective decision making, they struggle with how to best use data, according to a new report from Forrester, “Data Literacy: What Is It, And Why Do Executive Teams Need To Care? Leveraging Data To Achieve Maximum Business Benefit Requires More Than Technology Tools.”
The report focuses on how data literacy is a vital ingredient often missing, partly or entirely. It “delves into what data literacy really means and why it’s fundamental for business.” Chief information officers (CIOs) should use the report (and an included checklist) to detect the symptoms of data illiteracy and avoid its pitfalls.
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“Companies with lower levels of data literacy in the workforce (at all levels, from field engineers to CEOs and the Board) will be (and in many cases, already are) at a competitive disadvantage,” said Martha Bennett, vice president and principal analyst, Forrester. “It’s also important to stress that different roles have different requirements for data literacy; advanced firms also understand that increasing data literacy is not a once-and-done training exercise, it’s a continuous process.”
These days, everyone in an organization needs to be data literate, and the organization must establish a well-rounded data literacy program to ensure effective decision making. The programs must address the capacity to collect, analyze, and disseminate data tailored to the needs of diverse organizational roles.
Forrester’s survey results confirm the need to improve data insights:
“Lack of data literacy puts you at a disadvantage, and can lead to potentially disastrous outcomes,” Bennett said, “and we’re not just talking about a business context here, the same applies in our personal lives.”
Numbers play a role in daily decisions, both in business and in our personal lives. Quantitative information must be evaluated, whether it’s predicting an event, considering the increased risk of developing disease, how people lean politically, or how popular a product or service is. Data, as facts, supports arguments and pushes agendas
Being data illiterate can be an issue, because you run the risk of:
Omitting inconvenient information is one way to mislead with data presentation, and charts that don’t show scale and don’t start from zero can mislead by exaggerating differences.
An example of manipulative data producers include chart interpretation or deriving meaning from data visualizations. The report revealed:
Forrester defines data literacy as: “The ability to recognize, evaluate, work with, communicate, and apply data in the context of business priorities and outcomes. Data literacy is the ability to read, work with, analyze, and argue with data.”
Tool competency doesn’t equal data literacy. Conversely, the most advanced statistical skills and tool proficiency won’t produce valuable insights if the person using them lacks domain expertise or business context. Data literacy exists at the intersection between data, tools, and individual skills and expertise.
Consider, the report noted:
A firm can push their company towards data literacy by making data critical in all areas of business, looking for gaps to find your starting point, establish a data-literacy program, and make sure it’s role-based, and focusing as much on the providers as the users.
The report offered the following “checklist” for organizations–how data literate is your business?
Dashboards falling into disuse
Lots of unused licenses for self-service tools
Co-workers saying “I have no affinity for data,” or “I just don’t do numbers.”
Gut feel remains the primary decision-making criterion
Decision makers “bending” data to suit their argument, and nobody pushing back
Executives asking for “whatever data you can get your hands on”
“Lack of data literacy is a problem in both corporate and personal life,” Bennett said. “Until data literacy is taken for granted in the same way as `traditional’ literacy, the ability to read and write, we’ll have issues, whether it’s bad decisions in companies or societal consequences because numbers are used to push positions that in reality the data doesn’t actually support.”
The Forrester survey was fielded in March and April 2019. This online survey included 3,417 respondents in Australia, Canada, China, France, Germany, India, the UK, and the US from companies with 100 or more employees.
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