Data literacy is employees' ability to read data correctly, assess its reliability and draw a decision from it. It is not a technical skill but a matter of understanding: whether an indicator measures what we think it measures, whether the sample is large enough to draw a conclusion, why an average is misleading with uneven values, and why two figures moving together does not mean that one causes the other. Without this level, two opposite problems arise – decisions based on random fluctuations, and data being ignored in favour of impressions. It can be raised by jointly going through reports with an explanation of how the data came about, by a unified data dictionary, and by management itself asking for the source and the method of calculation when making decisions. The effect shows immediately – discussions about whose figure is correct become significantly shorter.
See also: Data dictionary, Data quality in analytics, Executive dashboard.
