How can I use data to grow my business?
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How every business leader can avoid analysis paralysis and lack of sleep
Last week’s Panorama documentary about how Amazon use “big data” was a stark reminder about how some businesses use information to understand and dare I say control future human behaviour. So, how important is data in your business and what should you be measuring?
Three questions for you to consider when it comes to measuring data;
- Does the data give you a valuable snapshot of how well your business is doing?
- Does the data pinpoint the key issues that need identifying, discussing and solving?
- Does the data tell you what behaviours are prevalent in your business?
Are you sleeping comfortably knowing you are in control?
It’s common for business leaders to wake up in the early hours of the morning with an uneasy feeling that they haven’t got their finger on the pulse of their business. Often the fear is that the business is controlling you rather than you are in control.
Perhaps you are measuring the wrong things or measuring things that don’t really tell you anything useful? Maybe you don’t have sufficient data that would alert you to issues that need addressing?
You could spend the following day asking people for their opinions on the topic that’s worrying you, but often their opinions will be subjective rather than based on hard data. So, what do you act on? Your intuition? Your teams’ subjective views? Or do you need to put in place a system where you have at your fingertips each week, a handful of meaningful numbers that allow productive discussion and positive decision-making, putting you in control?
There are many names for this snapshot from smart numbers, to dashboard, to KPIs, to metrics, to scorecard. Whatever you decide to call your data summary, the important thing is that it tells you at a glance what is happening in your business right now! For best results you need to see these numbers weekly so that you can respond in a timely manner.
Am I measuring the right stuff?
Maybe, maybe not. Two important principles though are (a) are you producing activity-based numbers, something that means when you are off-track you can quickly change direction? Secondly, are you looking at trends and patterns, rather than over-reacting to one bad week?
The first point is key. A business owner said to me recently that he loves the data that comes out of Xero, his online accounting tool, especially the Profit & Loss account that he can see daily if he so desires. The problem with a P&L though is that it is based on activity that has already happened. You need data that can help you shape the future, next week, the week after, next month. What activities that happen each day or each week in your business should you be tracking?
Do the numbers I track give me a rounded, Whole Brain perspective?
Whole Brain ®Thinking is something that Zentano advocates as a vital part of running a successful business. It involves thinking from the logical view to the big picture view. It also means tapping into the people perspective and the practical viewpoint. Examples of this Whole Brain perspective include financial data, tenders or written proposals for new business, customer ratings and risk measures.
Imagine you are going to be away from your business for a protracted period and you want a one-page document each week that gives you that snapshot of your business. What data should be on it?
To create your one-page summary you will need to identify what matters to you and how these things can be measured. You will need to set goals against those measures, decide who is accountable for delivering those goals and appoint someone who is responsible for collating the data each week. Avoid the temptation to measure too many things. Less is more.
Your summary document should be a proactive tool that allows you to remove barriers, solve problems and make good decisions. It should support a dynamic growth plan if growing your business is your aim.
There will be other data that you review less often (monthly or quarterly) such as financial statements cash-flow forecasts, budgets etc. Your weekly snapshot though is the thing that puts you in control and allows you the best chance of a good night’s sleep!
If you need guidance in creating your weekly snapshot, something that will propel your business growth using a Whole Brain perspective, please give us a call on 01905 915596 or drop us an email on firstname.lastname@example.org.
Zentano offer a business growth service, please click here to contact us to find out more.