Setting Key Business Questions

A common challenge organizations face is the lack of clearly defined objectives, which can lead to confusion about the types of questions that need to be addressed. Establishing clear business goals is imperative for formulating key business questions.

What exactly constitutes a key business question? It is a query linked to your business's objectives, whose answer can guide you toward achieving your strategic goals. For instance, if one of your objectives is to boost online sales, pertinent questions may include: "What is the number of visitors to our website versus the number of purchases made?" and "Who constitutes our current customer base?"

To begin, it’s essential to outline your strategic objectives, such as increasing revenue or enhancing profit margins. Next, draft your key business questions, aiming for fewer than ten. If you find yourself with an extensive list, consider prioritizing and narrowing it down.

Understanding and Interpreting Data

While having the right questions is vital, it’s equally important to comprehend and communicate the data obtained to answer those questions. Understanding, analyzing, and conveying data are integral components of data literacy, which every individual should strive to develop.

Data can be communicated effectively through visual representations, which highlight significant insights crucial for decision-making. This is where dashboards come into play. While they may appear straightforward to create, many organizations falter here due to the misconception that it’s merely about assembling data into graphs and KPIs. According to Bernard Marr, a dashboard serves as "a collection of all of the essential information you need to answer your most pressing questions."

However, it's important to note that dashboards typically reveal only the 'what' and often overlook the 'why'—a common pitfall for many organizations.

Data Storytelling

Harvard Business School defines data storytelling as "the ability to effectively communicate insights from a dataset using narratives and visualizations." This skill is crucial for putting data insights into context and motivating action among audiences.

Data storytelling encompasses three primary components:

1. Data: A thorough analysis of complete and accurate data forms the foundation of your story. Employing various analytical methods—descriptive, diagnostic, predictive, and prescriptive—can provide a comprehensive understanding.
2. Narrative: A verbal or written narrative conveys the insights derived from the data, including the context and recommended actions.
3. Visualizations: Visual tools such as charts, graphs, and diagrams enhance clarity and retention of the data story.

Data storytelling can serve internal purposes, such as advocating for product enhancements based on user feedback, or external goals, like persuading potential customers of your product's value.

To create a compelling narrative, follow this three-step approach:

1. Start by discussing the process, including the key business questions you formulated.
2. Detail the analysis conducted and the data utilized to arrive at conclusions.
3. Share the insights gathered and the outcomes achieved by implementing your plans.

For instance, you might conclude that expanding product variety for the 35-45 age demographic will lead to a 25% increase in online sales. This insight could be shared during a presentation or in a written format.

Conclusion

In contemporary business, data-driven decision-making stands out as a primary application of data. Organizations must adopt smarter, more informed approaches to advance towards their strategic objectives. With the three skills outlined here, any organization can progress toward becoming fully data-driven.

Stay tuned for future articles that delve deeper into data-driven organizations.

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