Ultimate Guide to Data Literacy

Data continues to transform practically every industry, from construction and transportation to finance and healthcare.

But as the amount of data that companies collect grows, teams often do not have the necessary skills to work with and make sense of data.

This skill gap puts companies at a serious disadvantage. It restricts their ability to identify new opportunities and make data-driven decisions.

Improving data literacy across your company can help.

In this article, we’ll look at what data literacy is and why it’s important. We’ll also cover the steps you can follow to improve data literacy across your organization.

What Is Data Literacy?

Data literacy is the ability to analyze, understand, and communicate about data. It enables you to tap into the full potential of your data.

Companies are amassing more data than ever before. But data on its own doesn’t tell you much unless you have the necessary skills to extract meaningful insights.

Data literacy skills include:

Knowing which data collection methods to use

Interpreting data visualizations like charts and graphs

Understanding how to use different data apps

Recognizing when data isn’t presented properly

Communicating about data to key decision-makers

Of course, data literacy also involves taking the insights you’ve gained to inform key business decisions. One example is using historical data from various construction projects to help with bidding on future projects.

As more companies become data-driven, being able to work with data is no longer something that’s “nice to have.” It’s becoming essential to stay competitive.

Let’s look at why in the next section.

Why Is Data Literacy Important?

Achieving data literacy isn’t easy. But it can ultimately boost your bottom line and empower your team to make data-driven decisions.

Here’s why data literacy is important and why improving it needs to be more of a priority if it isn’t already.

Data literacy informs decision-making at all levels.

87% of business leaders say their organization will be more successful when employees are empowered to make decisions.

However, companies aren’t doing enough to equip their employees with the skills they need to understand and analyze data.

When you take steps to improve data literacy, you’re able to extract meaningful insights and inform decision-making at all levels, not just management. 

Examples include marketing teams determining which channels to focus on and purchasing teams ordering certain goods based on future trends. 

Data literacy allows you to measure performance and forecast trends.

90% of business leaders place greater importance on data since the onset of the pandemic. 

Companies have had to rely on more data and analytics to react to changing circumstances across the globe quickly. 

Being able to work with data can prove extremely valuable. Not only can it help inform key decisions, but it can also help you visualize and forecast trends.

For example, companies often utilize predictive analytics in marketing to forecast future behaviors and identify which channels are more likely to provide the best results. With these insights, you’ll have a much better idea of where you should allocate your budget.

Data literacy enables you to communicate insights better.

Data can be difficult to explain. You can’t present your data in tables and graphs and expect your team to understand it right away (no matter how visually appealing they are).

Even when you derive meaningful insights from a set of data, you need to be able to effectively communicate your findings. Otherwise, you’ll be left with a bunch of fancy tables.

A key component of data literacy is data storytelling — the ability to build a compelling narrative around a set of data. With this skill, your team will be able to communicate insights better and explain why a particular finding is important to key decision-makers.

In short, data literacy can help every employee perform their job better and make more informed decisions. It can also streamline your operations, as you won’t have to wait days or even weeks for data scientists to interpret data. 

However, despite these benefits, there are still numerous barriers that prevent organizations from becoming more data literate and fully utilizing their data.

The Biggest Barriers to Data Literacy

Even though data literacy is important, just 21% of employees are confident in their ability to read and communicate about data.

Before you implement training programs to improve data literacy across your organization, it helps to understand the barriers that may prevent your team from embracing data.

Let’s take a closer look at what the biggest barriers to data literacy are and the different ways to address them.

Data literacy can be limited by company culture.

Company leaders must instill a culture that embraces data. If leaders don’t take a data-driven approach to problem-solving, there’s little incentive for employees to work with data.

Company leaders must actively seek and embrace data to inform decisions even if it goes against their initial conclusions. This sends a strong signal that leadership is committed to creating a more data-driven culture.

They must also encourage employees to become more confident with data and facilitate collaboration between teams. Removing data “gatekeepers” and making data more accessible is also key to improving data literacy.

Data literacy can be blocked by technical barriers.

Another barrier to data literacy is technical limitations.

In an effort to become more data-driven, your company might be collecting more data from different sources. But do your employees have the resources to make sense of it? 

You need the right tools to visualize and extract meaningful insights from your data. Otherwise, you’re left with dormant data that you collect but don’t analyze for insights. This type of data is often unstructured.

Data holds little value on its own. By using the right tools, your team can turn raw data into informative reports and communicate their findings to upper management.

Fear can hinder data literacy.

Finally, another barrier to data literacy is more personal. Some people simply don’t have the skills to analyze data or may be reluctant to learn those skills.

While you may want to make sweeping changes across your organization, there may be those who are less enthusiastic about them. It’s easier to keep the status quo than to change it.

Now let’s take a look at how you can improve literacy across your organization. Taking these measures won’t be easy, but it’ll benefit your company in the long term.

How to Improve Data Literacy Across Your Company

In the past, companies may have had a few data professionals on staff to analyze data and communicate their findings. But now, almost every employee in your company needs to have some level of data literacy.

Of course, improving data literacy is easier said than done. We’ve already covered a few barriers that prevent organizations from becoming more data-driven.

Fortunately, you can overcome these obstacles with the right plan and drive positive changes across the board. Follow these steps to get started.

1. Communicate the “why” behind data literacy.

Getting employees to respond positively to new changes isn’t easy. 

Any data initiatives that you implement will likely meet some resistance. It’s important to communicate changes ahead of time and engage employees as early as possible.

Find ways to help employees understand the “why” behind data literacy. What benefits can they expect to get by improving their data skills? How will it make their work more efficient? This will make it easier to get them on board, and it can even turn them into data advocates for your company.

For example, you can discuss how a unique insight led to a new opportunity. You can also share examples of how certain individuals on their team made tough decisions using data.

When you can show your team the insights you’ve discovered and what you did with that information, you’re also signaling the company’s commitment to data literacy.

2. Foster a culture of learning and encourage questions about data literacy.

There has to be a culture where learning is encouraged and rewarded. Employees need to feel confident that they can ask questions without fear of being judged or punished.

Building a culture of learning starts at the top. Managers should set an example and take part in continuous learning themselves. They should also encourage their team and continually reward their progress, even when things don’t turn out as expected.

3. Conduct a data literacy assessment.

Employees have varying levels of confidence with data — some are seemingly wizards with Excel, while others may only have a basic understanding of tables.

The next step is to assess the data literacy skills of your employees. This will help you determine their data proficiency levels and identify any knowledge gaps, which will come in handy as you create custom learning paths.

The Data Literacy Project offers a helpful assessment that you can use. It asks a series of questions and presents four answers to choose from. 

It then provides learning resources that are tailored to different “data personas,” like the Data Dreamer, who recognizes the value of working with data, or the Data Doubter, who needs more convincing before they get on board with a data literacy program.

4. Establish customized learning paths for data literacy.

There’s no one-size-fits-all approach when it comes to data literacy. Trying to tailor one program for everyone just won’t work, as different roles often require varying levels of data skills. 

For example, a salesperson will likely work with different datasets than someone in IT. Likewise, a senior-level decision-maker will require more advanced skills like statistical analysis than a front-line employee.

Assess the data literacy of your team to establish a baseline. Then put together custom learning paths to fill in the knowledge gaps, and be sure to include hands-on training. Consider implementing a “buddy system” by pairing those with similar learning paths to help each other.

5. Set targets for data literacy and measure the results.

Like any initiative, it’s important that you set clear goals and measure progress at regular intervals to determine what’s working and what’s not.

Check in regularly with your team and seek their input. Do they have any feedback on the learning path you put them on? Do they feel more confident in their data skills? Is there anything else they need to succeed in their roles?

Finally, try to find ways to tie data literacy to specific outcomes. For example, maybe someone on the sales team discovered a new opportunity using their data skills. Or maybe someone from IT found a way to lower operating costs. Showing these results to management will encourage them to continue investing in data literacy skill training.

6. Provide ongoing support and data literacy training to your team.

Even with custom learning paths for your team, achieving data literacy isn’t something that happens overnight. It requires consistent and ongoing effort.

Make sure that you continue to provide ongoing support to your team. Examples include:

Providing regular feedback.

Enlisting data specialists to host seminars.

Encouraging employees to enroll in data courses.

Conclusion

Data literacy is becoming increasingly important because companies are amassing more data than ever. Being able to analyze, understand, and communicate about data helps you make better decisions.

Improving data literacy isn’t easy. It involves shaking things up across your organization and taking your team out of their comfort zone. But it can have a positive impact when done right.

Follow the steps laid out here to help your team advance their data skills — foster a culture of learning, conduct a data literacy assessment, create tailored learning paths, and measure progress at regular intervals.

Of course, in addition to providing ongoing support to your team, you’ll also need to equip them with the right data apps and tools. 

Toric is a powerful data platform that enables you to consolidate your data into one workspace, making data more accessible and usable to your team. Create a dataflow, build custom reports, blend visualizations, and much more.

Get a customized product demo to see our no-code platform in action. We also offer a free trial so that you can test drive the platform for yourself.