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What Is Data-Driven Decision Making? A Guide

May 10, 2019

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When you don't have anything to go on, making decisions can be a head-scratcher.

Should I? Or Shouldn't I?

Data-driven decision making takes the guesswork out of your decisions and allows you to make decisions with confidence.

Continue to read this article to learn more about data decision making so you can use it in your own business.

A Simple Explanation of Data-Driven Decision Making

While we all think our ideas are the best, if we the info and cold hard facts aren't on our side, we need to think twice. The data is there to guide and provide a clear route to our desired outcome.

The information age began in the 1970s, but if you compare the amount of data being processed then to today, you would see it pails in comparison.

Data lakes and other means of storage have so much data on each of us and all of our actions that is difficult to fathom.

When you're surfing the internet, you are likely to see ads that are shown specifically for you because of things you've shown interest in. You may have typed in a query about fishing trips in the past just to start seeing ads for fishing trips showing up on your feed.

These people are using data to make decisions. They are using data to decide who to show ads to.

The most simple definition of this activity is making decisions made off of information that is hard data. In this case, you are not making decisions off of your gut or intuition.

How to Implement This Decision-Making Process

If you want to use this strategy in your business so you can get better results, here are some simple steps that you can use. Keep these in mind when you're making your next big decision and see how it turns out for you.

1. Figure Out the Data You Should Pay Attention To

If you try to analyze all of the data that you get, you're going to end up being overwhelmed and possibly confused.

Before you even start looking through data, you need to make sure that you know what you're looking for. What questions do you want answers to? And what data is going to give you the answers that you need?

Even if you figure out what data you need to get the answer to your question, you need to make sure it is legal to use the information for that purpose. There are many laws that you need to abide by and you need to check your local laws.

2. Be Careful How You Collect Data

If the data that you need isn't already in a data warehouse, you need to make a plan on how to collect the needed data.

The data that you need might not be readily available to you for multiple reasons even if it does exist. One of those reasons could be that the information is in a non-digital format. It may also be in more than one system which will make it more difficult to retrieve.

In the case that the data does not exist yet, you have to think about how you are going to collect that data. You need to have a person in place to manage your campaign so you'll be able to make sure you make sufficient progress.

3. Analyze Data Using Critical Thinking

Once you get the data that you need to start the decision-making process, you need to start going through the analysis process. When you are looking through the information, you shouldn't take it at face value.

You have to take into account other factors that might be in play.

For instance, if you were collecting data to figure out how many people come to your ministry on a Friday. If you took data from two different Fridays and one Friday there were 233 and the next Friday there was only 57, that would give you an average of 145.

This could be incorrect, however, because the day your ministry only got 57 visitors was a day the city was under a flood watch.

You'll need to put further criteria in place, like looking at data on good weather Fridays that are not three day weekend holidays.

Using critical thinking to figure out if the data is giving you the whole picture is a must or you could make decisions using data that isn't helpful.

4. Use Visual Aids to Understand Results

Once you collect the correct data, make it easier on yourself by using visual aids. Turn the data into charts and other visual aids.

When you can see what they are saying, it is easier to make decisions based upon your data's findings.

If you don't know how to turn the data that you get into charts and other visuals, you can use PowerPoint or even Google sheets to make your information easy to digest.

Need to present your findings at a meeting? Visual aids are the perfect way to get people to see your side of the story. Have multiple data backed visuals to get the backing that you need.

Network & Grow Your Business

Now that you know more about data-driven decision making, you will be a more effective leader. Making decisions is an important part of growing any business.

Make connections with other like-minded believers. Continue exploring our website and look at the community blogs to learn more from others just like you.