Commanding leadership has always been crucial to a flourishing business. From giants of the industrial age, such as Andrew Carnegie and John D Rockefeller, to tech wizards like Bill Gates and Steve Jobs, we have built up a perception of leaders as charismatic, innovative and visionary figures who can drive companies forward with their unique abilities and perceptions. There is a great deal of truth to this, of course, but in the modern world especially, leaders also need to be capable of making reliable, informed decisions that can help ensure a stable but innovative future for their company. As a result, leaders today are expected to have a sophisticated understanding of every aspect of their company and to use information from a wide range of sources to make rational, informed choices that will benefit their organization in both the short and long term.
So, what kinds of skills do leaders require in today’s fast-paced business environment, and how can they harness the power of analytics and other technological tools to enhance their decision-making abilities and drive the company forward towards a brighter future? In this article, we assess not only what is needed to make an effective business leader in the 21st century, but also the key role played by analytics in decision-making, as well as how data can help provide a more objective, reliable basis for the choices companies make. In addition, we also look at the kind of career path that can lead to a position in this field, including the potentially key role played by formal education, relevant work experience and a positive attitude to lifelong learning.
Constantly changing times
Though all leaders are different, some of the qualities that make a good leader are surely universal, including hard work, the ability to inspire and command respect, good business sense and decisiveness. Yet it is also true that the nature of leadership, in terms of both the skills and knowledge required and the kinds of tools needed, evolves over time.
One of the biggest developments over the past few decades has been the emergence and wide acceptance of informed decision-making. Informed decision-making is based on the assumption that making quick, instinctive decisions without a detailed analysis of the situation is not always the most effective method and can, in many cases, lead to costly and troublesome mistakes. While there is still room for intuition, informed decision-making is about ensuring that any final decision is backed by careful exploration of the most important factors involved and analysis of objective quantitative and qualitative data.
One of the fundamental supports for informed decision-making is the field of analytics and data interpretation. In general terms, data analytics refers to the use of a wide range of significant business-related data to help support business choices. The data can be structured, where it is easily organized in terms of traditional data management tools like spreadsheets, databases and tables, or unstructured, such as social media posts, emails, images and videos, which is usually quantitative and requires more advanced analytical techniques. In addition, analysts also work with semi-structured data, which is a mix of the two above, and big data, which refers to large and complex data sets that are too large to be analyzed manually and require the use of special analytical tools.
Today, one of the most fundamental abilities of a leader is to be able to understand analytics in decision-making. But what are the key areas to master, how can they be applied to business and how can prospective leaders uncover their secrets?
Optimizing the way we work
One of the main advantages of modern data systems is that they are capable of providing extraordinarily detailed insight into the day-to-day operations of the company. For instance, companies are often able to see real-time data regarding each individual process in their organization, whether it’s sales figures, warehouse stock levels or production capacity. This is not only useful for seeing the general direction of the company but can also help decision-makers identify weak points and areas for improvement.
In addition, access to real time data can also be useful in determining how to allocate resources. With constant, comprehensive analysis of key data points and a company-wide appreciation of the importance of continuous improvement, it is possible to optimize workflows across the organization, which provides a great way to not only ensure more efficient working processes, but also to save time and reduce costs.
Similarly, data can also be used to identify growth opportunities. If a particular part of the company is experiencing significant growth, data analysis can not only identify it in the first place but can also help decision-makers explore its true potential. Externally, an analytical approach can be vital when exploring new areas of business, particularly when there is less internal expertise within a particular field. Just like elsewhere, making data-backed, informed decisions instead of simply deciding on a whim can do a lot to eliminate costly or time-consuming errors.
Mitigating risk and building security
Risk mitigation is another important area of analytics. In addition to prevention achieved by building more secure systems, data analytics typically involves the collection, structuring and analysis of data in order to identify, assess, predict and manage risks within the company. While there are various approaches, a typical method here would be to take a specific area, such as cybersecurity, and perform a comprehensive analysis of strengths and weaknesses in the network, before identifying ways to improve the system. Monitoring is crucial to ensure that security remains of the highest standard, continuously working to pinpoint vulnerabilities and resolve any existing or potential security issues.
Risk mitigation through data analytics generally makes use of a wide range of data sources, including historical records, external data sets and real-time information. In this way, the company is able to uncover patterns, trends or correlations that may indicate potential risks. Decision-makers and analysts are then able to address risks proactively and can also work to implement measures that can eliminate danger or mitigate potential damage caused to their business processes and infrastructure.
Understanding the customer on a deeper level
One other area where data is absolutely key to decision-making is understanding the customer or client. Once again, cutting-edge data analytics and software enable us to develop a sophisticated understanding of customer behavior that would have been unthinkable in the past. For instance, if someone is making an online purchase, the company is able to monitor their actions, perform A/B testing on the best ways to present the product and send reminders, notifications and promotions that might encourage both initial and repeat purchases.
This kind of approach is not only a great way to optimize sales but can also be used to enhance the customer experience by ensuring a more enjoyable and seamless process. This can be achieved by eliminating points in the buying process where the data indicates that customers get stuck or experience some technical issues, for example. The ability to receive instant feedback from customers is also an extremely useful tool. If a company wants to launch a new product, analytics can provide them with near-instant feedback in terms of not only the customer’s opinion of the product itself, but also the ways in which they use it, whether they are likely to recommend it to a friend or colleague and what kinds of problems they might have experienced.
The company is then able to improve the product on a continuous basis. Other areas where analytics can be used to improve customer relations include enhancing general levels of customer satisfaction, improving product and service design, optimizing marketing and communication channels, designing and improving customer channel strategy and implementing strategies to increase customer loyalty.
Reacting in real time
Regardless of the area of business, companies can produce agile responses to react to market changes and developments. In a situation where there is a surge in popularity of a specific product, or if production in a particular factory shuts down, through the use of analytics, leaders can be made aware of the situation immediately, and work to adjust production schedules and reallocate resources accordingly. Similarly, if sales fall in a particular market due to an external factor such as a drop in currency or a local financial crisis, the company should be able to take action to reduce production. Alternatively, they may want to consider targeted price reductions or special promotions to encourage consistent demand.
Finally, within the company, performance management and appraisal can benefit from some of the same mechanisms. Today, both quantitative and qualitative data are collected to help monitor staff performance, and appraisal meetings and feedback sessions can also be monitored to assess their progress. Again, the best approach is to look to create a virtuous cycle of performance, monitoring, evaluation and feedback, while constantly taking steps to improve the system at hand.
In each case, the emphasis is on both improving performance and finding ways to avoid or reduce unnecessary costs. While leaders may use these tools themselves, they are just as likely to rely on presentations and interpretations from other members of the team who have had the time to carry out detailed analysis. This does not mean, however, that all the leader needs to do is sit back and accept the recommendation provided. Instead, they are often responsible for helping to interpret the information, unlocking its secrets and then using it as a basis for finding the right way forward. In other words, the analysts provide the context, and the leader selects the path.
Taking a wider view
Naturally, data-driven decision-making doesn’t mean a focus on data to the exclusion of all else. There will always be important factors in any decision that cannot be easily measured or quantified. Soft skills will always be important, and leaders need to be great communicators who are not only capable of expressing and conveying key ideas to the members of their team, but also willing to listen and learn from the people around them.
In addition, it is extremely important to be consistently capable of looking at the bigger picture, especially when a particular data point may initially appear to point overwhelmingly in a certain direction. Yes, a particular new product may be doing exceptionally well in a specific market, but does that mean production should be ramped up across the board? In this kind of situation, leaders need to consider a wide range of additional questions, such as: Will the product be successful elsewhere? Is its popularity linked to other factors, such as seasonal preferences or a particularly effective marketing campaign? Will increased production lead to issues in other areas of the business?
Gaining a greater understanding
From the above, it is clear how data analytics help business progression. People wanting to learn more and develop such highly sought after skills should consider studying for a Master of Science in Business Analytics at a reputable institution such as St. Bonaventure University. With this kind of program, students gain targeted knowledge about cutting-edge practices in this field that can provide them with a significant competitive advantage over their peers. During this program, students focus on a range of key areas of analytics, including analytical programming, data warehousing, data visualization, predictive analytics and prescriptive analytics. They also have the chance to work with a number of programming tools, including Python, MySQL, Tableau and Excel Solver Analytics.
Another advantage of this kind of program is that it can also be taken entirely online. In general, online degrees are increasingly popular and often offer a much higher degree of flexibility. For this reason, they are particularly popular with students with existing work or family commitments.
An ever-changing field
Naturally, even upon graduation, most students will have much more to learn as they attempt to apply their newly found knowledge to real world situations. The best use of analytics encompasses not only a high-level understanding of the techniques, theories and tools available to interpret data, but also the knowledge of exactly how they should be applied, what their limitations are and the numerous other factors that affect every single decision in a complex business structure. In addition, leaders also need to be able to express their ideas to their team and convince the people around them of the value of their analysis.
Fortunately, most businesses today have a far greater appreciation of areas such as data analytics than in the past, and leaders with genuine expertise in data analytics are now much sought-after by all forward-looking companies. Even so, the best leaders continually look for other ways to stay ahead of the pack, especially in rapidly changing areas of business such as technology or analytics.
While private reading and research can often be effective, many leaders also take part in mentoring programs. Additionally, there is a wide range of online courses available in all manner of topics, while other options such as in-person events, webinars and conferences can also be extremely valuable sources of knowledge. In each case, the emphasis is on the leader to remain open to new ideas, eager to learn and curious about both the world at large and all aspects of their specific field of business.
Analytics are key to informed decision-making
Anyone surveying the business climate in the present day will clearly be able to identify the importance of strong leadership, as well as the value of informed decision-making backed by data analytics. To thrive in this kind of environment, today’s business leaders need to be extremely hard-working, devoted to their field, knowledgeable and inspirational, and have a firm grasp of the ways in which decisions are made, and how they can exploit the power of data and technology to steer their company, division or team in the right direction.
This is what being a leader is all about. There is no question that the path to success is long and hard, and there will be many mistakes made along the way. The best leaders, however, possess the drive to persist and the intelligence to keep learning as they go, ensuring they do the same for their company too. If, through careful preparation, a high level of training, relevant experience and the application of first-degree knowledge and targeted data analytics, they are able to make the right decisions more often than not, they are sure to be an extremely valuable asset at any company they contribute to.
