Data: The New Language of Business
March 14, 2017
If you’ve been to the company page on our website, you probably noticed our manifesto.
This list of statements has many layers, and we could spend plenty of time dissecting any one of them. But what we’d like to take a closer look at is the declaration that “data is […] the new language of business.”
What do we mean by this, exactly? And how does it relate to your organization?
Everyone has some contextual understanding of what the terms “language” and “data” mean, but let’s take a bird’s-eye view for a second and pin these down.
Among the definitions offered by Merriam-Webster for “language”, we find
a systematic means of communicating ideas or feelings by the use of conventionalized signs, sounds, gestures, or marks having understood meanings
We’ll do the same with “data”, which is described as
factual information (as measurements or statistics) used as a basis for reasoning, discussion, or calculation
So we have (1) a way of communicating ideas and feelings and (2) factual information.
Let’s dig a little deeper.
Defining the Relationship
Sometimes words (language) and numbers (data) are thought of as opposites on a spectrum. After all, words convey ideas and emotion while numbers transmit facts, right?
In reality, numbers are just as useful in storytelling and communication as their non-numerical counterparts; neither exist in a vacuum. In most practical cases, language describes a situation or concept, and data offers relevant, complementary details.
While both elements are important in sharing a story or idea, data has become more and more important in the way we communicate.
The Big Game
In order to illustrate just how important the role of data is in telling a story, we’ll look at an example that simulates a real event.
Let’s say there was a basketball game between Team A and Team B. I’ll try to describe what happened in the game without using any data.
Team A took the lead early on, but lost its starting center late in the first half to an ankle injury. A rookie came off the bench for Team B and put up career-high numbers, helping them secure a much-needed win.
Without additional figures, the above information feels very dry. We don’t know how decisive the victory was, how the injury affected the game, what difference the rookie’s individual performance made, and so on.
When we add data to flesh it out, it paints a more complete picture.
Team A had an early lead of 25 to 14 at the end of the first quarter and Team B struggled to get a rhythm, making just 5 of 18 attempts from the field. In the following quarter, Team A’s starting center, who leads the league with 15 points, 15 rebounds, and 4 blocks per game this season, left the game due to an ankle sprain. Team B’s rookie shooting guard came off the bench and led his team with a career-high performance, making an impressive 12 of 15 from the field, including 4 of 5 three-pointers. This was Team B’s first victory following six straight losses. The final score was 128 to 110.
Language tells you who won the game last night. Data shows how they did it.
Why All This Matters
When it comes to business, the role of data becomes even more crucial. Everyday decisions are (or ought to be) dependent on relevant data that supports a specific course of action.
It’s not enough anymore to suggest a course of action by saying
We need to go after phone users more aggressively. Everyone uses a phone these days.
Statements not backed up by data aren’t necessarily wrong, but are at risk of being rooted strictly in assumption or anecdotes.
A better example, and one that should be more common, would be
Our internal web stats show that around 65% of our users are browsing on a phone, which is consistent with numbers from other sources. We haven’t traditionally targeted these users, but now may be a good time to consider it.
Now more than ever, data is the precursor to informed decision-making.
What You Can Do
Understanding the role of data and using it to your advantage is becoming more and more of a necessity. In order to succeed, a business needs to understand the function of data and how to use it properly from the top down:
- Executives. Know where the company stands, what its strengths and weaknesses are, and what (and where) data fits into that process.
- Hiring managers. Incorporate direct questions that ensure candidates are data-fluent and can contribute to a data-centric culture.
- Team members. Understand why and how to obtain both internal and external data to justify important business decisions.