How to Make the Right Data-Driven Decisions: The Secrets of the DIKW Pyramid

How to Make the Right Data-Driven Decisions: The Secrets of the DIKW Pyramid

Have you ever heard of the DIKW pyramid?  If not, you’re not alone. If you’re up for a refreshing shift in perspective on how to make data-driven decisions, read on...

Stratasan views the DIKW pyramid as the best and most philosophically accurate way for leaders in the healthcare space to understand how they are capitalizing on their resources, both in terms of tools and people, and make more informed strategic growth decisions. Understanding the relationship between the layers of the DIKW pyramid also helps us articulate exactly how Stratasan adds value to our customers.

To start, I’ll explain what the D, the I, the K, and the W stand for.

D - Data

I - Information

K - Knowledge

W - Wisdom

To boil it down, the DIKW pyramid represents the hierarchy of decision-making. This philosophy is what our company was founded upon, and we have become believers in its ability to drive thoughtful and meaningful strategic growth decisions

Within the healthcare landscape, change is constant. As a result, growth departments within hospitals, whether that be Strategic Planning, Marketing, Business Development, or Physician Relations, must make informed, data-driven decisions. Stratasan helps hospitals and healthcare systems make more informed decisions and drive strategic growth via our technology and professional services. The DIKW pyramid explains our approach to this objective.




At the bottom of the pyramid is data, which is the foundation of the pyramid and what everything else is built upon. The healthcare space is flooded with various types of data: state data sets, medicare data sets, hospital patient data, demographic, psychographic, and so on. Making sense of this data is necessary in order to drive strategic growth decisions, but it can be a “catch 22” because understanding, cleaning, aggregating, and updating this data is difficult to do and requires a tremendous amount of focused, dedicated energy. 

Information sits on top of the data foundation and is attained by providing context to data. Information is data that has been queried via an analytics platform or deciphered by an analytics team, which begins to give the data meaning and purpose. An example of this is when data has been uploaded into Stratasan's analytics platform in its rawest form and is then arranged into charts and graphs to become more meaningful. At this point, it’s a collection of data that has been contextualized and organized, but has not yet been acted upon or applied. 

Knowledge exists above information in the DIKW pyramid and represents the synthesis of multiple sources of information over time. Knowledge often comes in the form of frameworks, theories, and potential solutions for the problems or decisions at hand.

Wisdom is the ideal state and exists at the top of the pyramid. Ultimately, wisdom is a state of awareness. It’s a paradigm or set of principles by which a person, or in our industry a hospital, will act. Wisdom brings everything together and is the most important state of understanding because it is where higher-level thinking takes place. At this level, the decision maker should be able to teach or explain to others what is happening in their market and why it’s happening.

As we evaluate the healthcare landscape, we see hospital resources getting caught in the weeds, spending the majority of their time in the data: interpreting it, cleaning it, updating it, trying to make sense of it. This leaves less and less time for the higher, more strategic levels of thinking -- where the best decisions are ultimately made.

This results in local experts, who know their markets best, not using their time most effectively. They spend hours working to aggregate and make sense of data, which is not the highest and best use of their time, when they could be having more strategic, higher-level conversations around long-term growth strategy and opportunities in their markets.

Stratasan’s goal, using our data analytics tools and our Spark Services, is to give this lost time back to marketers, strategic planners, business development teams, and others whose goals are to strategically grow their hospitals through data-driven decisions. This additional time, combined with actionable intelligence and the local expertise of a market, allows for better strategic decisions to be made at a faster pace, which leads to more meaningful results.

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Article by Drake Jarman, VP of Sales for Stratasan.

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