Goldilocks and the use of data in your business

Photo by Jeremy McKnight on Unsplash

Do you ever feel like Goldilocks when it comes to the use of data in your business? Are you confounded by a raft of data so big that priorities are hard to find and your nimbleness is hampered
by analysis paralysis? Is your data set too small, so that the determination of whether you're on track or not depends upon the last thing that happened, or upon your mood du jour? Are you in search of the data that is just right - enough to validate your direction or point to needed course correction before things get out of hand?

Whether you consider yourself to be a "data person" or not, we've all been told that it's the way to make decisions. Data keeps the inevitable emotional attachments at bay long enough to determine that it's time to pull the plug on initiatives. Data gives reason to celebrate, when you know for sure that this week your team produced more than it has ever done.

"Just right" data connects to something
Data for the sake of data can create mental clutter. Just like salt in a stew, more data is not always better. Start by establishing your goals, then choose to collect the data that helps you know whether you are moving closer to them.

"Just right" data choices change over time
Your priorities change, and your data should follow them. Our practice at ProActive Leadership Group is to help companies update their plans quarterly.  During our planning retreats, client companies create a strategic window that stretches as far as a 10-year BHAG (big, hairy, audacious goal). But between here and there are 5 year strategic moves and 1 year and quarterly tactical plans.

The quarterly updates guide the execution necessary today to make the 10-year BHAG a reality over time. Your quarter is a 13-week race, and you choose the data to measure your progress. You might keep track of your cash reserves (data for your longer term goal) while measuring gross profit (your focus for this quarter.) Next quarter, with gross profit in line, you may turn your focus to sales cycle time or the % close on quotes. Collect that data.

"Just right" data reflects priorities
What are your top five priorities? Now what is the top one of the top five? Perhaps you have 5 data points, one for each of your priorities. Or perhaps that top one is so all-consuming that you decide your team needs to be single-minded until you hit the performance level you want to hit. Post that number on the wall, in your internal newsletters. And when you reach your target, celebrate. Celebrate! Then turn your head to the next quarter, prioritize and keep measuring. Change the measurement, if progress toward the new priority is better reflected in different data.

Fear of the data is no reason not to try stuff
Goldilocks tried stuff. She tested the porridge, the chairs, and the beds until she found the ones that were just right for her. Some of your business experiments are going to fail. If they don't you're probably not trying hard enough to get out of the box you're in. A comfortable, padded, velvet lined box is still a box. Yes, data will make failure readable in black and white. That's only a problem if you stop moving - if instead you evaluate what happened, re-prioritize and take another action, the data will reveal your progress.