When chaos and disorder abound, data is the way forward.
All too often I find businesses stuck in a rut, they are trundling along, doing just OK, or sometimes, not even OK. They have challenges, the same or similar challenges they had last year, and the year before…. They are working hard, there are good people in the team, they are trying different things, but just not making headway.
So what’s going wrong?
Data is the key to unlocking success. Ultimately every business has challenges, lots of them. What differentiates the successful ones from the rest? The ability to analyse, remove the noise (the insignificant many) and focus on the priorities – the significant few. This means that maximum value is gained for any improvement activity undertaken, after all, there are only so many hours in the day, and by doing this, positive progress can be made quickly.
So, to get to the point of understanding what’s important, we have to have data, we need to measure inputs, outputs, targets etc. However, even then it’s easier said than done;
- Are we looking at leading or trailing indicators?- (even the team on Dragons Den are starting to use this terminology)
- Is it a direct metric or a surrogate?
- Have we picked the right metric?
These are not easy questions to answer, and there is nothing better than experience to help you pick your way through this. That said, something is usually better than nothing, and provided the data is easy to collect, then there is little lost, and a lot to be gained.
Interpreting the data can be challenging at times, as not everyone finds it easy to interpret data. This is one of those areas where the more you do it, and the more familiar it becomes, the easier it is. I have found the whole use of data through the Covid pandemic very interesting. Being an Engineer, I am very familiar with data and can usually quickly understand and interrogate it. I love the way the government have tried to present data to the general public, using that data to explain the actions that it is taking, and enabling everyone to have a deeper understanding of what’s really happened. There have even been some great conversations about leading and lagging data, confidence levels etc, which sadly may not mean much to many, but are crucial to interpreting data and making good decisions based on it.
Many successful businesses use a ‘balanced scorecard’ to capture and track their key metrics. A simple Red / Amber / Green indicator makes interpretation of the data really easy for everyone involved to understand clearly the status of any metric. This is a great example of the simplicity of visual management tools in running a business. I have used this approach to run entire businesses before with great effect.