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Employees empowered to make data-driven decisions spur growth
A new report from ThoughtSpot and the Harvard Business Review finds that organizations empowering front-line employees to make analytic decisions poised to outperform their competitors.
When employees on the front lines, the ones actually meeting with customers rather than those in back offices and board rooms, are given the tools, training and authority to make data-driven decisions, it makes a huge difference in the success of a given organization.
That's the finding of a new report from ThoughtSpot, an analytics vendor founded in 2012 and based in Sunnyvale, Calif., and the Harvard Business Review titled, "The New Decision Makers: Equipping Frontline Workers for Success."
A total of 464 business executives across 16 industry sectors in North America, Europe and Asia were surveyed for the report.
The survey found that only 20% of organizations are giving their front-line employees both the authority and the tools -- self-service analytics platforms and training -- to make decisions based on analytics. Those organizations, meanwhile, were most likely among the respondents to have seen more than 10% annual growth in revenue in recent years.
As a result of their objective success -- their growth -- those enterprises were dubbed Leaders.
Another 43%, however, were deemed Laggards. They were organizations that have so far failed to give their front-line employees the ability to make decisions driven by data, either by not providing them the BI tools and training or simply not giving them the authority, and were seeing that reflected in their bottom line.
Scott Holden, chief marketing officer at ThoughtSpot, recently discussed the report in detail.
In a Q&A, he delves into the hypothesis that led ThoughtSpot and the Harvard Business Review to conduct the research, as well as many of the key findings.
Among them were that, even among Leaders, a vast majority of organizations (86%) believe they're not yet doing to enough to give front-line employees everything they need in order to make data-driven decisions. Meanwhile, among those that have at least begun giving front-line employees the necessary tools and training, 72% have seen an increase in productivity.
What was the motivation for the survey -- what did you see in the market that led you and Harvard Business Review to team up and undertake the project?
Scott Holden: We sponsored this research because we had a hunch that companies that empowered their frontline employees with faster access to data would outperform their [competitors]. That was the primary premise, and we wanted to explore the idea and see what other dynamics surrounded that -- what was holding them back, what were the Leaders pursuing and doing better than the Laggards -- and that was the impetus for this.
What were the key findings, what did ThoughtSpot and HBR discover?
Holden: We all know that technology plays a huge role in productivity gains and empowering people, but there's also a big cultural transformation required -- a process change -- and how do the things you do as leaders impact how people adopt technology, and so that was another big component of this. We wanted to explore both dimensions, with the goal of giving leaders that are trying to transform their companies a guide to how to do something.
When you look at the key findings, there are a few things that stand out. Not surprisingly, but it was good to confirm this, companies want to empower the front lines. Ninety percent of all respondents said, 'Yes, we want to do this; our success is dependent on being able to give fast access to data to all people.' That's not surprising, but it's good to see the number be so high. But then it gets a little bit more surprising because almost the same percentage, 86% of them, said that they need to do more. They're basically saying they need to provide better technology and tools to empower those employees. They're saying, 'We're not doing enough,' and more specifically, only 7% of the people surveyed though they were actually doing enough. That was our hunch, but the data proved out really strongly to say that there's certainly a movement afoot here and people want to be doing this and they need to be doing a better job of it.
How do organizations stand to benefit from empowering employees to make data-driven decisions -- what can they accomplish that they couldn't before?
Holden: There was the benefits that companies saw -- if you do this we think this will happen -- but there was a nice nuance if you dig into those performance improvements, which is the difference reported based on what the Leaders were doing versus what the Laggards were doing.
Scott HoldenChief marketing officer, ThoughtSpot
The dimensions by which people saw improvements were around productivity, employee satisfaction, employee engagement, customer satisfaction, and then an improvement in quality of products and services. Some specific stats were that if people said they were to give their employees better access to data and facts, 72% said they would increase their productivity, 69% said that they would increase customer employee engagement and satisfaction, and 67% said they would increase the quality of their products and services.
Basically, everybody thinks that across the business, if we do this we're going to see big, big improvements in what would be the core levers for any business. If you look at higher employee engagement and higher customer satisfaction, when you empower an employee with more and better access to data, they actually become a happier and more engaged employee, and if they're the one that's on the front line talking to your customer, that translates into better service and better customer satisfaction. There's a nice tie-in to how this actually plays to delivering better services and experiences to your customers in a really relevant way.
What are the obstacles?
Holden: This is where it gets into Leaders versus Laggards. I was really kind of blown away. One of the things that I saw was that -- and this is a little counterintuitive -- the laggards were 10 times more likely to say they don't want to empower the front lines. There's a good chunk of the Laggards out there -- 42% of the Laggards – [that] said they actually don't think they should empower the front lines. This really gets into what I think underlies this big thing that's standing in the way of the analytics industry right now, which is that historically analytics and data-driven decision-making was done at the top, sort of ivory tower analytics. If you were a C-level executive you probably had a data analyst or someone who worked for you who gave you access to information, and you were able to use your management Dashboard to help you make decisions. For practical reasons, it's hard to give every employee on the front lines access to data analysts, and there may be some trust issues.
What we're seeing in this report is that there's a real lack of trust, and that's why you're seeing a lot of Laggards say they don't think they need it. You see that the Laggards have a backward view of what's driving success, and that empowering the front lines really is an important thing and they're missing it.
If an organization wants to empower front-line employees to make data-driven decisions but hasn't begun the process, how does it get from Point A to Point B?
Holden: New technology can help. If you make it faster and easier, people are more likely to use it. But there are a couple of other key elements here. In the report, there are five key ways that folks are empowering the front lines: leadership; putting data in the hands of folks; governance, which is building the right process and security around the data that you do expose; training; and facilitation, which is a nuance that ties into training, having managers who are bought in because they're the ones that facilitate the training and make it happen.
Technology companies across the board are so eager to talk about technology, but you can see that other than data, the other things are about leadership, governance, management, training, and it is a full cultural experience to transform your business to be more data-driven. Fifty percent of the Leaders said that culture was a key factor where only 20% of the Laggards did -- and Leaders and Laggards were based on success metrics, objective measures that show whether they're outperforming their industry or not. Building a culture around data-driven decisions is a key factor here that can't be underestimated.
What is the danger for organizations that don't give their front-line employees the tools to make data-driven decisions?
Holden: There's a huge danger, and this is why the Laggards versus Leaders thing was so stark. If you aren't buying into being a data-driven company and putting the leadership, the culture, the training, the thinking in place, you are going to fall behind. This report statistically says that you are going to miss out on a big opportunity if you're not thinking strategically about making this shift. I think it's a pretty big wake-up call. Data has been a key asset for companies for a while now, but pushing data further out into the front lines, and the success that can have on your business, is a newer concept -- it's not just empowering leaders to make decisions but empowering the marketing manager, the retail associate, the local hospital administrator, the person on the factory floor. Those folks need fast access to data too, and that is an eye-opening discovery.
Editor's note: This Q&A has been edited for clarity and conciseness.