Data drives decision-making across every industry. Should we hire another salesperson? You check the data. Should we change global freight carriers? You check the data. Should we acquire another software company? You had better check the data. Everyday, organizations are parsing dashboards and crunching numbers in an effort to uncover the best path forward. At every level, decisions made from data dictate business outcomes.
Understanding data is no longer novel in organizations. It’s expected. More specifically, the ability to communicate data and drive smart decision-making is the real test of a contemporary leader. That’s because everything from tactical to strategic decisions is made from data. After decades of advising top brands on data storytelling and training organizations to make data-informed decisions, we at Duarte determined that workplace choices typically boil down to three categories.
Let’s explore.
A helpful way to conceptualize the types of decisions made from data is to consider the scope of their impact. Oftentimes, there’s a direct correlation between the size of the decision, such as sunsetting a product line or breaking ground in a new market, and the data required to paint a clear picture. To this end, the demand for data increases proportionally at each level of decision making: discrete, operational, and strategic.
At the lowest rung, discrete decisions are one-off inquiries about a specific data trend. These are more tactical, low-risk decisions that don’t require vast analysis. Oftentimes, it only takes a simple ping of a dataset for a ‘yes’ or ‘no’ answer.
Typically, a single data point, table, or chart may give you the information you need to act confidently. One data point could confirm whether you should stop an activity, start something new, or continue with what you’re doing because it’s working. You may decide to renew an ad campaign, check if sales dropped after a price increase, or understand why a project is over budget.
While they can have broad impact, discrete decisions are slight adjustment to a process that dials up or down a desired result. At the next tier, decisions play a larger role in moderating fluctuations in data trends over time and thus requiring greater analysis.
Operational decisions take a wider view of a problem or opportunity than their discrete cousins. To gauge performance, operational decisions demand prolonged observation, often in real time, to determine a course of action. Whether viewed daily, weekly, monthly, quarterly, or annually, performance data allows decision-makers to evaluate how data trends change over time. Were these numbers expected? Or is there an irregularity that requires an innovative approach?
You might notice a sudden drop in sales for a certain product line, or a trend of increased costs in a certain geographical area. These insights are often uncovered through dashboards and tracking results from regular reports. To rule out one-off occurrences or anomalies, monitoring ongoing performance can help isolate trends within their historical context. Data never exists in a vacuum, so having the most information around a problem or opportunity is essential to understanding its full complexities.
In short, the bigger the decision, the more data is needed to act with purpose. And when it comes to macro-level decisions, leaders want all the data they can get.
At the highest level, strategic decisions determine the future path of an organization, industry, and beyond. Here, as much current data as possible is used to project where you should go in the future. These data points might not come from one place. To get an accurate picture, decision-makers synthesize information from a variety of internal and external sources.
The stakes involved in strategic decisions can be intimidating as well as widely divergent. The right bet can gain market share, but the wrong decision can have you meeting with teams about layoffs.
While data can help predict how a future trend may develop, it takes intuition and guts to chart the correct course. Merging with a competitor, opening a new market, or even transforming the type of business you’re in requires immense data to make informed decisions. But data rarely explicitly states what to do. That takes the vision and perseverance of a practiced data storyteller.
Decisions that seem obvious to you may not be obvious to others without clear communication. Although the numbers themselves are important, what leaders often need is not just data, but an explanation as to what a proposed action will mean for business outcomes. The more strategic a decision is, the more leaders need you to explain your reasoning with words and visuals. This is where telling a compelling story with data can make your recommendation stand out to decision makers.
Getting others to buy in on executing a decision made from data requires communication skills that are part art and part science. Here, relying on a three-act storytelling structure and grounding each movement in careful observations can bring urgency to a stale data trend. Presenting a crisp, data-backed narrative at the right time could establish your reputation as a trusted advisor.
Data alone can’t communicate a strategic vision for the future of your team, organization, or industry. Only a skilled data storyteller can do that. To start telling more effective stories with data for all types of decisions, explore Duarte’s data storytelling training workshops to hone your craft. Or to learn more about our full range of services, book a call with a Duarte Solutions architect.
We’re always here to help.
To access additional blogs, free resources, and more expert insights about data communication, visit The Duarte Guide to Data Storytelling.
