A EIU report shows that culture, not technology, is the critical first step to develop a data-driven business.

Report identifies three stages in becoming a data-driven business and only 25% of executives agree that their employees are able to readily extract relevant insights from data available to them.

A new report published by The Economist Intelligence Unit shows that developing a corporate culture where data is embraced is the critical first step toward becoming data-driven, more so than the more common path of focusing initially on technology and tools.

The virtuous circle of data, sponsored by Teradata, reveals three key stages that businesses generally go through as they seek to become data-driven.

First, they tend to focus on technology and tools, then on acquiring the right talent and expertise—and, finally and most crucially, on developing the right corporate culture where data are embraced and applied day-to-day. An earlier focus on leadership and culture—indeed a reversal of these stages—would better serve organisations, however, the report says.

Companies that outperform the competition are much more likely to have leaders who spearhead data initiatives and lead by example (58% of them agreed vs 49% of average and sub-par performers), and they are less likely to be challenged by a lack of leadership commitment to the data strategy (23% vs 41%). Yet motivating and engaging employees across all levels of the organisation to use data can be a greater challenge—and a vital one to overcome.

While the data boom has reduced executives’ reliance on ‘gut feel’ to justify business decisions, only 25% of executives agree that their employees are able to readily extract relevant insights from the data available to them. Financial chiefs indicate they are especially data poor.

Riva Richmond, the editor of the report, said:

“There is no substitute for a CEO with a vision and personal mission to inspire and reinforce a culture that looks to data to understand the business and the world in which it operates—and make decisions based on those facts. Our survey supports this clearly: Companies that outperform the competition are more likely to both have strong leadership and democratised data access and use.”

The report also finds that the leaders in the data cultural revolution not only make data easily accessible, they also invest in data visualisation, which allows data to be seen in stark visual terms and strongly improves employee engagement with data tools and initiatives.