The Data Literacy Project says that workforce data literacy has proven to have a positive correlation with corporate performance. Improved corporate data literacy positively impacts gross margin, return-on-assets, return-on-equity, and return-on-sales, resulting in $320 to $534 million in higher enterprise value over organizations with lower data literacy, according to the Data Literacy Index.
The study also found that 76 percent of key business decision makers aren’t confident in their data literacy skills.Gartner cites poor data literacy as the second-biggest internal roadblock to the success of a Chief Data Officer (CDO), predicting that by 2020, 50 percent of organizations will lack sufficient AI and data literacy skills to achieve business value, and 80 percent of organizations will initiate data literacy programs to overcome extreme deficiencies. As organizations become more data-driven, poor data literacy will become an inhibitor to growth.
What is Data Literacy?
The Importance of Data Literacy said to “think of data literacy as a spectrum of related skills,” that provides a set of abilities. In a recent interview with DATAVERSITY®, Sarah Nell-Rodriguez, Data Literacy Strategic Manager and data literacy advocate at Qlik, defined data literacy as “The ability to read, work with, analyze, and communicate with data.”
The Data Literacy Index identified three core pillars of data literacy:
- Data Literacy Skills: Data literate organizations require employees who are themselves data literate. While most organizations obtain data skills through hires, education programs are also needed to help everyone understand and use data in their role.
- Data-Driven Decision Making: Data-driven decision-making is measured by two different aspects: data decentralization, so individuals have access to the necessary data they need to make decisions in their role; and data resources, which ensures insights are captured and presented in a way that supports data-driven decision-making.
- Data Dispersion: Data skills dispersion measures how widespread the use of data is throughout the organization, as every department, beyond clusters of specialist functions, must be able to derive insight and act on it.
Based on the performance of an organization against these three dimensions, IHS Markit and WhartonSchool, University of Pennsylvania academics developed a measurement system they call the “corporate data literacy” (CDL) score to measure corporate data literacy.
Data Literacy Findings
Researchers found that companies recognize the importance of data skills, and 63 percent of large businesses plan on increasing the data literacy of their employees, yet there are significant gaps between the importance that companies put on data, and the actions companies are currently doing to support data literacy. The research also found:
- Ninety-three percent of business decision makers believe that data literacy is relevant to their industry and it is important for employees to be data literate, yet less than a third see data literacy as an important factor in a successful economy.
- A significant skills gap exists, with just 24 percent of the global workforce fully confident in their ability to read, work with, analyze, and argue with data.
- Despite 78 percent of the global workforce being willing to invest more time and energy into improving
their data skill set, only 34 percent of firms currently provide data literacy training and just 17 percent “significantly encourage” employees to become more comfortable with data.
- Companies also aren’t providing incentives for literacy, with only 36 percent of business leaders willing to pay higher salaries to employees who are data literate.
- Nearly all business leaders acknowledge that data is important to their industry and in how their company makes decisions, yet only eight percent of firms have made major changes in the way the data is used over the past five years.
- Data-driven decision-making has the lowest score of the three dimensions of Corporate Data Literacy measured.
“The results don’t lie. People just aren’t data literate. They’re going more with gut feel for decision-making than with actual data,” Rodriguez said.
The Skills Gap
Unprecedented amounts of data are now being created, and new technologies simplify data, enabling employees to analyze and interpret it more quickly. However, a tool is only as effective as whoever uses it, said Rodriguez. “We pay attention to how much technology has changed, but how often do we go back and update our skills?”
Many companies also assume that young people entering the workforce have superior data skills, yet universities are failing to ensure students have the data literacy skills they need. According to the study, only 21 percent of 16- to 24-year-old students are data literate. Companies need a workforce that knows how to input data, generate better insights, and is empowered to use it to inform decision-making.
When Rodriguez started in BI, “analytics” was the buzzword. Now, when AI, machine learning, and other new technologies have emerged, she said, “We need to bridge that old world with the new world and we need to fill that skills gap with data literacy.” A spectrum of related skills is part of it, she said, as is culture, but it’s also just embracing the idea that things aren’t the same as they were a few years ago. Doing things the way they’ve been done in the past won’t lead to success. “Organizations have to recommit to up-skilling their workforce or they risk being outdated.”
Of course, in every organization there will be people who continue to stay up-to-date, she said, but there are also jobs that are evolving that have never had to be data literate before. Not all jobs have been equally impacted by technology to the extent that they are today, so in some cases, people who have never worked with data before now have to learn to develop that spectrum of skills.
Mom and Dad Get Digital
Even if it’s not necessary at work, cultural change on a global scale means the use of data is a life skill we all have to adjust to now. “I think of it in terms of my parents. They have to learn how to log into platforms now to access their bank statements, so they’re having to read data in order to organize their life,” Rodriguez said.
With a career change, Rodriguez had a moment of realization about how technology impacts life in different ways than ever before:
“When I had to really make a shift from retail to working in business, I consider that my ‘data literacy moment’ because I had to learn to create pivot charts and reports in Excel.”
Not Just “What,” but “Why”
Many businesses are still at a point where BI and Analytics were ten years ago: looking at diagnostic charts based on things that have already happened. Data literacy is about going beyond that and being able to make data-driven decisions by not just seeing that something happened, but why it happened and what can be done about it. “It’s really about getting people further along in their maturity level. That’s a global struggle with organizations right now, building a culture around that approach.”
Starting a data literacy “movement” can seem like a daunting task, but Jordan Morrow, head of Data Literacy at Qlik, in a white paper entitled How to Drive Data Literacy in the Enterprise, recommends starting with a four-step process:
- Communicate: Consistently talk about the power of data, from the top down, using relevant examples.
- Assess: Gain an understanding of skill levels and customize training on a personal level, company-wide.
- Train: Find ways to support different learning styles and abilities so everyone is able to become literate.
- Iterate: Continual improvement and updating will keep skills relevant and useful.
Rodriguez adds that the best learning is platform-independent, so that the concepts and abilities are useful in a variety of settings. In the Six Sigma training process, she learned what a histogram is, how a Pareto chart is used, and what a control chart can do, independent of the platforms that were used to create them. “I needed to know those things, but a platform wasn’t going to teach me what they were, how to read them, or what their purpose was.”
Data Literacy Advantages
Data literacy has become a competitive differentiator, making an impact on performance, she said.
“It’s not that you won’t grow without it, but you’ll grow more if you incorporate data literacy into your culture and workforce.”
Surveys of organizations that have started investing in data literacy skills are seeing three to five percent greater value when they’ve invested in their workforce. Those companies have leadership actively involved in creating and implementing a shared vision of data literacy.
Another advantage of investments in data literacy is having a highly skilled workforce that is invested in the company. The Index showed that 85 percent of data literate people say they are performing very well at work, compared to 54 percent of the workforce in general, and 82 percent of US respondents said they would be willing to invest more time and energy into improving their skillsets, if given the opportunity. “Education is definitely to the benefit of a corporation. Your employees are going to have fantastic skills that they can brag about.”
Despite the willingness of many individuals to improve their literacy skills, there can be resistance to change. Having a data champion onboard such as a CDO is key, so that C-Suite members can see the importance of literacy and lead accordingly. As more employees are given access to use and access data, governance also becomes increasingly important.
A one-size-fits-all approach will not succeed, so Rodriguez recommends querying each different line of business and asking what their needs are, where they are today with data, and where they need to be, going forward. The goal should be an initiative that invests in data literacy as a whole, with a collective approach so that everyone across the enterprise does better professionally, but also personally, she said.
Rodriguez suggests starting with a data literacy assessment on the Data Literacy Project’s website, with recommendations for next steps for learning, and short, easy-to-digest modules. All materials are free. “Even if you just want to know how to read a chart, I think it’s a really great touch point.”
She also suggests connecting with people who are practitioners on the discussion board on the Data Literacy Project site. “There are people on the boards who have had to up-level their skills across multiple different platforms. Just connecting on there is a great approach.” Build on the basics by allowing curiosity to lead the way. Seek out other sources where education is available, “because that curiosity is going to lead you where you need to go.”
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