Tag: data-driven decision-making

The values companies live by are becoming increasingly important for today’s consumers and employees. A recent survey from Deloitte found that both Millenials and Gen Z were willing to remain with a company for longer if they were happy with its environmental and societal impact. They were also willing to reject job offers if the companies failed to align with their values. As each new generation shows a clear favoring toward values, it will become increasingly important that companies become values-based businesses to attract and retain talent—and potentially even improve the employer and consumer experiences. 

But keeping a business in line with its declared values can be difficult. The recent collapse of FTX highlights exactly what can happen when your values become untethered from your business. Whether your company is losing track of its original values or not delivering on them as promised, this hints at an imbalance between what people want and what’s practical for business. As values-based companies become more important to people, it’s crucial that companies are able to answer the question of what a successful values-based business actually looks like. 

As an organization working to educate the next generation of entrepreneurs and business leaders, we’ve considered what it takes to do exactly that, and we believe that much of it is a matter of balance.

To succeed, values-based businesses need a more measured approach

The way to approach values-based goals and planning is to ask not only how a venture or business is adding community value but what that value-add is actually worth to customers. If it’s not worth what it’s costing to produce, then chances are good that it’s not financially viable. 

In order to be sustainable, a company’s values need to align with its performance—not drag it down. For example, environmentally friendly products often cost more than their environmentally unfriendly counterparts. So, if a startup is looking to create a product that’s better for the environment, leaders need to ask themselves if consumers are willing to pay for the extra cost that goes into making it? This is because a values-based business usually needs more than good intentions to succeed—it needs to be able to earn its keep.

While a values-based business should have its own set of values, these values should also reflect the community that the business resides in or markets to, the values of its customers, and the values of shareholders. This can be part and parcel of being financially viable. If your consumers, community, and shareholders all believe in the values of your business and the products or services you produce, they will be more likely to stay loyal customers. 

How entrepreneurs and startup leaders can successfully lead with values

Leading with values is admirable and can be immensely profitable and beneficial to the community. Research has shown that values-based brands perform 134% better than others on the stock market. But this approach needs a commitment that amounts to more than just lip service—it requires a strong belief in establishing business values and mission with a solid foundation on which they can grow. Here are a few places to start:

Be genuine

No matter how skilled business leaders may be, they can’t manufacture intrinsic value—it needs to already be there. Leaders need to truly believe in what they’re doing rather than using values as a means to gain financial independence or be their own boss. It’s got to be genuine. If it’s not genuine, then don’t do it.

Quite a bit of environmental, social, and governance (ESG) investing, for example, is done on the backs of marketing glitz and little else. In a 2022 report by The Harris Poll, 86% of executives polled believed their company’s ESG efforts were making a difference, but only 36% of executives reported having tools to measure that difference. On top of that, only 17% are using the results to optimize their efforts.  

The same is often true of social responsibility and diversity efforts. Too often, a single person is hired to head up these initiatives but given few resources to actually get the job done. The end result is that the values espoused by these positions don’t actually add up to anything beneficial for the community or for the company. Part of being genuine in the business world is making sure your efforts have the intended impact, so while you’re running your initiatives for ESG or EDI, don’t forget to check in and make sure the results are as expected.

Focus on doing one thing of value well

For those who truly have values as their central mission, the next step is to ensure there’s a viable enterprise to support it. This doesn’t mean figuring out how to turn a 50% profit or becoming the next Facebook; it means being able to do one thing well. This selectivity of the mission is the foundation of efficiency, and it helps to determine the fundamentals of performance for a startup.

An excellent example of this in action comes from Aravind Hospital in India. The late Dr. Govindappa Venkataswamy was one of the best cataract surgeons in the country. He brought people dealing with cataracts to the hospital and helped to restore their vision for free. In order to sustain this practice, he created a system where wealthy patients would receive this same treatment but could pay to have a private room rather than lying on a mat on the floor with others.

As a result, he managed to turn a 51% profit, making it possible to continue to help others and put money back into the community. If he had tried to do this for every single ailment in the hospital, the whole thing would have likely collapsed. But by focusing on one thing he did well, he could excel and make a real difference in people’s lives.

Don’t ignore the importance of performance

A popular approach for Silicon Valley startups is to endure losses for as long as possible in the hopes of being able to monetize later. While this has worked in some cases, it doesn’t change the fact that it’s bad business. Entrepreneurs should focus on profitability, not creating short-lived buzz.

Simply put, your business must be profitable to produce results. If you want to sell innovative products, create a workplace that benefits the employees that work there, or donate your profits to charity, it must be successfully funded to graduate from a dream to a reality.

A model centered on performance still holds true in a values-based company. To perform and make a difference, a values-based company makes decisions that will benefit the company, its employees, and its clients/customers to be financially stable for the long haul. If you want to become the entrepreneur or business leader that you aspire to be, remember that your values can and should go hand-in-hand with financial success.

When you’re leading a modern organization, you’re not just expected to focus on profits. More and more, purpose is playing a huge role in corporate navigation. This is why investing in leadership development that’s built on future-forward principles—including values-based, data-driven decision-making—has become a critical must-have for anyone seeking an MBA.

The benefits of creating a purpose-driven organization are becoming clearer by the day. Leaders who fold a sense of value into everything they do can enhance employee engagement, increase innovation and drive revenue. It’s a matter of being able to combine System 1 and System 2 thinking, something that takes practice and attention but can achieve huge successes.

If you’re unfamiliar with System 1 and System 2 thinking, they represent each side of the values-based, data-driven decision-making concept. System 1 thinking is gut-driven, whereas System 2 thinking is evidence-based and analytic. Many leaders end up leaning toward System 1 thinking, and that’s not a bad thing. Someone who’s been in the trenches for 30 years should have a good nose for the right solutions. However, new and seasoned leaders can both benefit from using System 2 thinking to back up their knee-jerk System 1 instincts.

When you’ve been trained in values-based, data-driven decision-making, you learn how to effectively merge the best-of-best properties of System 1 and System 2 thinking styles. For instance, a values-based, data-driven leader knows that leadership isn’t about mindlessly going with the algorithms, although those algorithms are critical, and that going with what they think is right might not turn out to be right for everyone.

The leader understands how to couple objective information with the values of the organization and its people—as well as the community and the customers it serves. This means that the data might support the decision you want to make and just reaffirms your gut instinct or the data might contradict the decision you think is best—leading you to do some more digging for a better solution.

Leaders who exemplify the future of leadership development

There are a few notable leaders around who are able to see the big picture through a values-based, data-driven leadership view. Marc Benioff at Salesforce leverages his Silicon Valley roots in that he’s tech-savvy and attentive to evidence. He’s outspoken about social issues, community causes and more. So he exhibits a holistic understanding of how to lead with thoughtfulness and integrity.

Another leader who has combined values and data for decades is Warren Buffet. Though his charitable side may seem to sit separately from his business side, they combine well to give him a high degree of authority, trust and respect.

Traditional MBA programs didn’t put a high degree of emphasis on delivering values-based, data-driven leadership classes in the past. Now, an MBA program must focus on cultivating this type of leadership in order to best prepare students to be successful leaders. At WashU Olin Business School, students can expect that we will focus on guiding students in the interplay and integration of combining values and evidence through their MBA courses to prepare them to be leaders ready for the future of business management.

What a values-based, data-driven MBA looks like

What does all this mean in concrete terms? At the Center for Analytics and Business Insights, we work with about five companies that come to us with problems containing strong data components they’re trying to solve, like pricing product lines or managing supply chains. Our student teams head up these projects and analyze the data to find solutions. Historically, this has resulted in ecstatic companies and students walking away with real experience solving problems that they might face as leaders of their own organizations.

Sometimes a problem will need a more values-based solution backed by data. For example, we ask students if the solution could somehow be guided by a bigger purpose, such as making the company a better corporate citizen. This makes sure our MBA cohort can experiment with solving leadership issues using ethics or values as well as data.

Last year, Olin’s MBA students worked with Schnucks, a local grocery chain. Schnucks wanted to better serve its customers who shopped at stores that were economically disadvantaged. Students kept this corporate citizenship angle in mind as they poured over data related to food stamps versus other payment options.

This year, our students will work with Reinsurance Group of America, Incorporated. RGA is working on the Longevity Research Program with Olin that has the potential to be able to predict COVID deaths or deaths related to other illnesses. This program focuses on research that can help predict the morbidity of patients with life-shortening diseases. Their goal is to help improve disease prognosis and prevent the disease entirely.

While projects that students can participate in may look at different companies’ efforts, each provides a unique take on values-based, data-driven decision-making. Our hope is to expand the horizons of our students so that they can see there isn’t just one way to look at values and data.

Future-forward leaders: Doing what’s right and responsible

Leaders today and tomorrow are going to be expected to wear a “values hat.” They’ll need to have a keen understanding of the relationship between data and values, and they’ll be expected to make important decisions with confidence. That’s not a small feat but it’s a doable one for MBA program graduates who’ve been trained on techniques like System 1 and System 2 thinking.

So why invest in leadership development at Olin? Values and data are part of our school’s nerve center. It gives our students the chance to dive into exciting research that may have far-reaching consequences. If you’d like to be a future leader and you’re ready to learn from dedicated faculty, you’re in the right place.

Pictured above: Olin’s Seethu Seetharaman leads the first morning in a two-day workshop focused on “values-based, data-driven decision-making” for board members of the Center for Analytics and Business Insights.

Eli Snir, senior lecturer in management for WashU Olin Business School, wrote this for the Olin Blog.

When thinking about the value of business education, one invariably ends up realizing that a business school is all about integrating multiple disciplines into a coherent analysis.

Yes, business classes involve statistics, marketing, accounting, strategy and finance. But to realize the value of these, integration across disciplines is key. That’s the objective of the poster session in the Managerial Statistics II course, DAT 121, a required undergraduate course that draws mostly second-year undergraduates.

Students choose a project of their own to demonstrate the skills they learned in the class, which are primarily multiple linear regression. Throughout the semester, our student groups work on their projects to hone their skills. The poster session is the culmination of this effort. Students present their work on posters to other students, faculty and staff.

Some of the posters that students displayed

Our key motto at WashU Olin is a value-based, data-driven, approach to decision-making. Each person brings their values to bear when choosing a project to analyze. Topics encompass the vast breadth of student interests, including public health, consumer engagement, movie success, financial markets, video game industry analysis, house prices and the always-popular sports analyses. Statistics is the tool that combines all of these together.

Through rigorous analytical methods, students develop models to understand the relationships between the independent variables and their chosen dependent variable. Often, these models assist in making decisions. We are laying the foundation for a data-driven approach that should guide students throughout their professional career.

A poster session is a format that is professional while being somewhat relaxed. The diverse audience in attendance challenges students to prepare a message that is managerial while showing their technical accomplishments. Casual visitors to Olin are interested in understanding the managerial insights from these analyses.

On the other hand, faculty stop by, too. They frequently want these presentations to exemplify students’ technical skills. Questions often require students to justify the methodologies they chose and explain statistical processes that are utilized. Fortunately, Olin students shine on both accounts. They represent the success of our programs.

And don’t forget the food. We enjoyed high-quality snacks throughout the event.

Pictured at top: The author, Eli Snir, with Avi Holzman, Kate Sifferlen and Omeed Moshirfar.

Considering entering an MBA program? Your timing is outstanding. According to research from the Graduate Management Admission Council, 91% of recruiters were planning to hire graduate management talent who possessed MBA degrees in 2021.

Reports from GetSmarter support the accuracy of those findings, revealing that 83% of companies said they planned to onboard MBAs in 2021. In other words, you’re on the right track if you’re considering pursuing an MBA degree through a rock-solid program delivered by a school with a strong reputation.

MBA seekers want to augment their undergraduate learning with the broad, comprehensive knowledge of managing a business enterprise and the skill set provided by an MBA. Another reason prospective students seek an MBA is career switching, and employees whose MBA curricula included coursework devoted to understanding the basics of managing others in the fields of analytics and technology are highly valuable in today’s data-intensive landscape.

No matter why you keep coming back to the idea of getting into an MBA program, you may find it helpful to identify yourself as a specific type of graduate student. Generally speaking, the majority of MBA students are either accelerators or pivoters.

Which type of MBA student are you?

From a broad standpoint, accelerators tend to be people whose career path includes ambitious “climb the ladder” goals. Typically, accelerators feel like they can’t take their next big step without a stronger understanding of the variety of functional areas important in the corporate world today. Through their MBA program, they expect to learn how to think strategically about the enterprise as a whole, to identify the right questions or problems to be addressed, and to address them so they can snag key promotions and rise through the ranks.

Pivoters also want education, but they want to use it to change their occupations or industries. For them, MBAs are ways to get a foot in a new door.

Take Tyler Whiteman, for example. He spent 10 years in the travel industry and did regional theater working as an actor and singer.

Tyler came to Olin Business School at Washington University in St. Louis for his MBA because he wanted to make a complete career switch. Ultimately, he chose to become a marketing intern for AB InBev and earned honors for his performance at the seventh-annual PepsiCo MBA Invitational Business Case Competition. He credits his WashU Olin experience for giving him a leg up against fierce competitors. Having the support of an esteemed faculty while solving real-world problems and learning the soft skills that come from working with people and organizations that represent cultures different from their own are tremendous experiential benefits.

Find the right MBA program for you

To be sure, you might be a combination of the aforementioned MBA learners. Or you might fit into a unique category. Regardless, you owe it to yourself to spend time getting to know the lay of the land when it comes to MBA programming. So many MBA programs are available.

You have the traditional immersive full-time two-year programs. You have in-person part-time programs that take longer to finish but can flex to accommodate a busy family lifestyle. Some MBA degrees can be earned partially or completely online.

It’s fairly easy to find a delivery format that will work with your schedule and circumstances.

Format isn’t the only defining factor of an MBA program, though. If you aren’t interested in taking a standardized test like the GRE or GMAT, you can still apply for many MBA programs. A significant number of schools have waived this requirement. Because there’s no guarantee those waivers will stay in place forever, you may want to take advantage of them while they’re here.

Putting a premium on globalization

It’s worth mentioning that while you can choose among a variety of delivery methods and admissions requirements, you should absolutely demand an MBA that makes global business a central feature of its curriculum.

The world is shrinking. The more global context you can bring to your business understanding, the more valued you’ll be as an employee and executive.

This is one of the reasons a cornerstone of WashU Olin’s full-time MBA program is its global immersion program. This program happens at the front end of the MBA. Students start in St. Louis and learn the foundations of values-based and data-driven decision-making. From there, they spread their wings and go to the Brookings Institution in Washington, D.C., to discover the ways business and government align. Next, they visit Barcelona, Spain, followed by Paris and then Santiago, Chile. Over several weeks, MBA students get familiar with how marketing, consulting, supply-chain management, and so many other functional areas interact in a global context.

The global immersion program helps incoming MBA degree candidates bond with their cohort from the very start. The program becomes the basis for future learning and other opportunities, like the ability to take globally focused courses such as Olin’s African business class and exchange programs. When students move closer to graduation, they may be able to work with international companies. Case in point: Some recent MBA students worked with the Ecuadorian Soccer Federation and were able to join them at a game held in the United States.

At the end of the day, it’s easier to develop soft skills like empathy, teamwork, and communication when you’ve formed cross-cultural relationships with a variety of MBA classmates, teachers, and companies.

A successful post-MBA experience

The choice of an MBA program shouldn’t be limited to what happens during your coursework. Having access to career services matters, too. At Olin’s Weston Career Center, MBA students are provided with individualized career coaching and mentoring. This prepares them for internships and real-world jobs. As a “thank you,” many WashU alumni return to help the next generation of MBA graduates pursue their dreams and goals.

At a foundational level, your desire to earn an MBA shows that you’re ready to change at least a small part of the world. And small changes can end up having big outcomes for individuals, communities, and organizations. Whether you’re a pivoter, an accelerator or a one-of-a-kind type of MBA candidate, follow your instincts. The right MBA program can help you gain cultural competency as well as hone your skills in areas that are important to modern employers. It’s never the wrong time to become a stronger, more confident leader.