Many business owners and executives fear being dead wrong when about to make an important decision. It’s a basic human tendency to feel this way. So paralyzing is the concern for some people that the decision never gets made.
When does this happen and why?
It often happens when businesses develop a false sense that they’re doing things right, combined with an attitude that spending money to analyze data is a non-essential cost. It also happens because intuition is still what’s primarily relied on by many to make important decisions, and because any data that would support one’s gut instinct isn’t neatly assembled and ready to be used.
But what if your data was in order? What could it tell you about how the business is operating and its general health? Would you want to see it and rely on it to help drive the decision? Surprisingly, many people in this position don’t. They opt to remain in their comfort zone and stick with intuition.
Taking a close look at your data requires real courage because, if done right, it’s going to reveal certain ugly truths about the business – about some of the people, the processes, poor decisions that have been made, customers you should fire, and a lot more. Not the easiest thing for a lot of people to come to grips with, especially if they’re responsible for prior decisions.
One thing about good data is it doesn’t lie. And it’s great for accountability. And it will surface various eye-opening truths, some of which are already out in the open and staring you in the face.
On the subject of truth:
The biggest inhibitor for businesses in using their data to help drive decisions is no confidence in the data’s accuracy. In 99% of companies, there is no single version of the truth when it comes to data. There are 3, 4 or 5 versions (maybe more) accumulated over the years. Left unfixed, this can cripple a company, and it will most certainly put you at a disadvantage against competitors that have better organized data and leverage it.
So what’s a CEO to do whose management team is already complaining about a shortage of data skills and IT resources? We recommend the following 3 steps:
- Inventory your data. Understand what you have. Understand what it is, where it is, how many versions of it exist, how it moves around, how long it’s retained, who’s using it, how important it is to the business. All other activity is fully or at least partially wasted effort without this starting point.
- Run some simple pilots that pay off in weeks/months and demonstrate efficiency gains through smarter handling of the data. Focus on areas that are meaningful to most employees — inventory management, scheduling, order management, etc.
- Take what is learned from the pilots to develop a longer-term, prioritized plan for managing data more strategically. If done right, part of this will involve an organizational change effort reflecting new and improved ways for operating the business.
Most industries are going through a digital transformation, making the management of data significantly more important than in the past. This is leading to new and ongoing discussions within companies of how data should be managed for strategic gain. Those decisions can’t be made without closely examining the data itself, which will result in some “wow” discoveries. Having the courage to get to this discovery point is a small victory. The big win comes when the findings are used to shape company direction.