What do we mean by being data-driven?

In today’s digital age, the term ‘data-driven’ has become a buzzword in boardrooms and strategy meetings across the land. We can’t move for data.

According to the International Data Corporation, the world generated 129 zettabytes of data in 2023, compared with 64 zettabytes in 2020, and is projected to double again by 2027.

To visualise just one zettabyte, imagine 213 billion DVDs stacked so high they would reach beyond Voyager 1, the farthest human-made object from Earth at about 23.6 billion kilometres distance.

But what does it truly mean to be data-driven, and is it always the best approach for organisations, particularly in the arts and culture sector? In this first article of a mini-series, I’ll unpack the concept of being data-driven, explore its implications and question whether it’s the ideal approach for the arts.

In the next article, I’ll make the case for a more balanced ‘data-informed’ approach, incorporating other crucial factors such as expertise, intuition and strategic vision. And in the third and final of the series, I’ll explore emerging trends in technology and data usage and how they might shape the way cultural institutions operate.

The promise of data-driven decision making

The allure of data-driven decision making is clear. It promises objectivity, precision and a scientific approach to solving business problems. By relying on hard numbers and concrete metrics, organisations aim to eliminate the biases and gut feelings that have traditionally influenced decision-making processes.

In theory, a data-driven approach should lead to more informed choices, better resource allocation and, ultimately, improved outcomes. It’s no wonder many organisations aspire to be data-driven, viewing it as a hallmark of modern, efficient management.

Netflix, for example, is often celebrated for its sophisticated use of data to personalise recommendations and inform content creation. By analysing user behaviour, the streaming giant can tailor shows to individual tastes while also green-lighting new projects that resonate with their global audience.

The reality of data-driven cultures

The reality of implementing a data-driven culture, however, is often more complex. As evidenced by the experiences of cultural institutions I’ve spoken to recently – including Battersea Arts Centre, the Design Museum, Edinburgh International Festival, Glyndebourne, Leeds Heritage Theatres, the Royal Ballet & Opera, and Shakespeare’s Globe – there are numerous challenges in truly embracing a data-driven approach.

One common issue is the misinterpretation of what being data-driven means. Some organisations equate it with simply collecting large amounts of data without knowing how to effectively interpret or apply it.

As one arts leader noted: “Everything is used to back up what you already know… not used to start a conversation.” This highlights a crucial point: data should be a tool for discovery and insight, not just a means of confirming existing beliefs or justifying decisions already made.

Even Netflix, despite its data prowess, understands data isn’t the whole story. Its investment in global content, such as non-English language shows like Money Heist, was a strategic move that defied conventional data wisdom demonstrating that it wasn’t just English-language content that could drive growth.

Being truly data-driven requires acknowledging the limitations of data. It’s in these gaps that innovation often occurs. Bold decisions go beyond anything the data can tell us.

The tyranny of metrics

In our quest to be data-driven, we risk falling into what Jerry Z. Muller calls ‘the tyranny of metrics’. We become so focused on measurable data we neglect what we can’t quantify.

By prioritising only what can be measured, we risk creating a cultural landscape that’s efficient but soulless, popular but uninspiring, profitable but lacking in artistic merit. As Lyn Gardner wrote back in 2015: “The greatest risk in theatre? Not taking any risks.”

The crucial metric for any organisation, but especially the arts, must be about audience engagement. Engagement is not just a measure of success – it’s the driving force behind financial viability.

Data-driven algorithms can only ever suggest content based on what users are already watching, but even Netflix invests in projects that might not have immediate data support because they align with a creative vision or a strategic goal and have the potential to engage audiences – such as The Irishman, a high-cost, artistically driven film by Martin Scorsese.

Though data suggested audiences preferred shorter content, Netflix saw the film’s cultural and artistic value and invested in it. The risk paid off, with millions of streams and critical acclaim.

Bold decisions often defy data, and it’s the engagement and impact that ultimately measure success.

The limitations of a purely data-driven approach

While data can provide valuable insights, relying solely on data can have its drawbacks. The creative and cultural sector illustrates some of the limitations of a purely data-driven approach:

Overlooking intangible factors: Data struggles to capture the often crucial, intangible elements in creative industries, such as artistic vision, cultural impact or audience experience. Despite the of efforts Arts Council England and others to introduce quality metrics in the evaluation process, they are often criticised for being oversimplified, subjective, open to misinterpretation and inhibiting.
Risk aversion: Over-reliance on data can lead to risk aversion, potentially stifling innovation and creativity. As one arts professional pointed out: “No creative industry is ever going to want to [create content] just to hit targets – it needs to have risk.”
Short-term focus: Data often reflects past performance or current trends, which may lead to a focus on short-term gains at the expense of long-term strategy. As another professional noted: “All data is doing is telling you what happened before.”
Misinterpretation: Without proper context or expertise, data can be misinterpreted or manipulated to support predetermined conclusions: “People see what they want to see.”
Neglecting qualitative insights: A purely quantitative approach may miss valuable qualitative insights that can provide a deeper understanding of audience behaviour and preferences. It can also put too much focus on the outcome rather than the process, where collaboration, experimentation and development are arguably more important.

The data-driven delusion

At its core, being data-driven means using data to inform and guide decision-making processes. It sounds logical, even responsible. After all, who wouldn’t want to base their decisions on hard facts and figures? But this approach can be dangerously reductive. If cultural institutions were truly data-driven from their inception, many might never have existed at all.

“Data would tell you that the Design Museum… should not exist.” This statement strikes at the heart of the problem with a purely data-driven approach in the cultural sector.

Success comes from beyond the data, from the willingness to take risks. After all audiences don’t know what they want until they see it. As Steve Jobs said: “Some people say ‘Give the customers what they want’. But that’s not my approach. Our job is to figure out what they’re going to want before they do.”

Returning to Lyn Gardner’s 2015 article, she writes: “The Dukes in Lancaster shows what being risk-aware, rather than risk-averse, can do. Since it replaced classic revivals and other potential crowd-pleasers with a programme devoted to new work – much telling local stories – the theatre’s audiences have risen from 80,000 in 2008 to 140,000 last year [2014].”

But it’s important to acknowledge that such risks can only be taken from a position of strength. Organisations or creators with a solid foundation and existing success are better positioned to undertake these high-stakes ventures.

The skills gap and the danger of misinterpretation

Many cultural institutions lack the in-house expertise to fully leverage their data. As noted by an executive working for a theatre company: “[We] don’t have anyone who can do data analysis – [I] want to use PowerBI, but don’t have the time.”

This skills gap can lead to data blind spots as well as misinterpretation of data, over-relying on certain metrics while neglecting others, which at worst results in misguided decisions, as well as missed opportunities.

At the other extreme, too much analysis can lead to ‘data paralysis’, where no decisions are made at all. Ultimately, data doesn’t drive anything – people do.

Towards a more nuanced approach

Given these limitations, it’s worth considering whether ‘data-driven’ is always the ideal to strive for – a more nuanced approach is needed – one that values data but doesn’t elevate it above all other considerations.

As we navigate an increasingly data-rich world, the challenge for organisations isn’t just to be data-driven, but to be data-wise – understanding when to rely on data, when to question it, and how to combine it with other forms of knowledge and expertise to make truly informed decisions. The challenge is not to be led by data, but to lead with data, using it to support the mission and vision of the organisation.

Data-informed

In the next article, I’ll explore this ‘data-informed’ approach, examining how organisations can strike the right balance between leveraging data and nurturing creativity. By taking a more balanced approach, cultural institutions can unlock the true potential of data in strategic decision-making while continuing to take the risks that drive engagement, innovation and cultural impact.

Let’s use data wisely, but let’s not be driven by it. Our cultural landscape will be all the richer for it.

David Reece is Deputy Chief Executive at Baker Richards.
baker-richards.com
@BakerRichards | @davidnreece

This article, sponsored and contributed by Baker Richards, is part of a series sharing insights into how organisations in the arts and cultural sector can achieve their commercial potential.

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rtomlinson

October 8, 2024

Some people will be surprised I am arguing this, though I have held this view since the 90s.

There is a hidden subtlety: to be informed by data you have to understand what it means and the implications for any decision/action you are considering. My late colleague Tim Roberts when we were updating my 1993 book Boxing Clever (I know, I have often been told I couldn’t have possibly written it then) to produce FULL HOUSE in 2006 also published in Spanish as AFORO COMPLETO emphasised there was ‘no point in knowing the data if you didn’t understand it or how to interpret it’. He also mercilessly argued that “well-meaning incompetence is still incompetence”.

From work for the Arts Councils across the UK and with The Audience Agency on Audience Finder usage, I was pleased many arts managers were honest enough to immediately admit not only not knowing where their data was and how to access it, but, when they did find it, the data was mostly meaningless to them; and there was no one on their team who had the competence… This is a huge issue for the Arts Councils, on responsible funding and appropriate funding levels. If say NPO funding goes to competent arts organisations, does their funding enable them to employ knowledgeable and experienced people to implement data interpretation and informed action?

Of course, blasting from the past, this problem was what Vivienne Moore and others at ACE Touring was tackling by building the UK national network of regional arts marketing/audience development agencies through the 80s & 90s (wonderfully partnership funded by local authorities and local arts & ents orgs). Unfortunately quickly wrecked by ACE once they realised. I also remember titans Stuart Nicole at Purple Seven and Tim Baker brainstorming with me on how could a ‘service’ be developed to achieve what Peter Verwey called “just push the button” analysis/interpretation/marketing action! Fortunately The Audience Agency emerged from the wreckage of ACE demolition of over 25 years work by their own staff; in a short time they had uniquely rich comprehensive data available to arts orgs and experts on hand to help interpret it.

Of course consultants such as Baker Richards and others emerged (declaration of interest: I collaborated with BR from their beginnings and I am an independent trustee on their Employee Ownership Trust) and consultants have provided an advanced level of strategic guidance and help to those organisations with enough understanding to make use of it. So long history to this. Peter Verwey recalled making a detailed presentation to arts marketing trainees with a q&a: first question “What’s a percentage?”. And an ACE officer bemoaning difficulties of getting reports from NPOs “They asked me who the Audience Agency was, what Audience Finder was, and why on earth was I saying they had their attendance data, how was that possible”.

Onwards and upwards please. Not backwards.

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