As Six Sigma practitioners, data is your best friend. So, how data-driven are you?
Over at Quality Mag, an article analyzes the concept of data-driven and which kind Six Sigma practitioners fall.
The Data Cost / Data Value Matrix is a simple two-by-two matrix that helps us talk about what it means to be “data driven.” On the horizontal axis we have the cost of data, going from high to low. On the vertical axis we have the value of data, going from low to high. The matrix gives us four quadrants. The “data driven” organization lives in Quadrant A, in the upper-right corner. Data are inexpensive and of high value. In my experience very few businesses meet this definition. Some have pockets of excellence, but most fall short of realizing their full potential.
While there may be an infinite number of ways companies fall short of being “data driven,” my experience is they fall into three broad categories, and they are represented by the other three quadrants on the matrix. I’ve seen all of these companies, and maybe you have too.
Companies in Quadrant B gain high value from their data, but pay way too much for the knowledge. From what I’ve seen, many Six Sigma companies fall into this bucket. For the most part these people understand how to maximize the value of the data. They know how to use the full array of statistical tools. They apply proven, disciplined techniques of project management and statistical problem solving to get to the bottom of chronic, entrenched problems. Payback from these programs can be huge.
