“Data-driven organizations.” That’s the Promised Land.
We’ve never had more tools and ways to capture data about our business and customers in the hopes of predicting consumer behavior, improving operations, driving sales and marketing ROI, reducing risk – you name it.
In terms of types of big data in demand, customer insights are at the top. Consumer data has perhaps become the most valuable currency for business leaders.
Our recognition of the promise and potential of data has created a side effect known as “data paralysis.” Organizations face a deluge of data. Strategic planning retreats might involve potentially hundreds of pages of statistics, trend lines, beautiful bar graphs, and pie charts (as well as fingers covered in paper cuts and blurred eyes).
“But what does it all mean? What should we DO?!”
The problem with big data is that it can be, well, too big. There’s a time and place for it, but we often need small, quick data points that help us make decisions and act quickly.
We don’t necessarily need LOTS of data, we need the RIGHT data. When we focus on the volume of data instead of the value of data, we lose sight of what we’re really trying to do with it.
In other words, it’s the actions you take that will define your success or failure. Data must lead to action or it is worthless. It’s not about statistical significance, it’s about substantive significance.
On important decisions, such as business growth strategy, we never have the luxury of having 100% of the data needed to understand all potential facets and implications. Ain’t no one got time for that. If you wait too long to act, not only does your data get stale, but your competitor will beat you to it.
The purpose of data is to mitigate risk. You need just enough data to feel confident in your decision making. But here’s a word of advice: don’t trust your gut.
In fact, don’t trust yourself or your team at all. Trust your customer. Let customer data validate (or invalidate) your hypotheses and build your strategy.
Most leaders would agree that it’s better to use data than to rely on their intuition, but, surprisingly, most make big decisions without it anyway. In a study by The Economist, 76% of CEOs viewed big data favorably but only 48% considered it a useful tool.
Why? Well, it often seems like time pressures and the need for data are at odds with each other. Gathering data to drive decisions takes time, right? In fact, only 52% of leaders felt like actionable insights were extracted from big data in a timely manner.
What would help? Many suggest making the data more accessible to the leaders actually making business decisions. This means making it easier to obtain and interpret insights that directly lead to action.
With accessibility to real-time consumer data, senior leaders would feel more confident making decisions about the growth of their business. In the 2015 KPMG CEO Outlook Study, 54% of CEOs felt like they weren’t taking enough risk as it relates to their growth strategy. CEOs were reportedly most concerned with their product/services relevance three years from now, keeping up with new technologies, and competitors’ ability to take business away from them.
All of these point to a strong sense of urgency and need to act quickly to differentiate their offering in a competitive market. In fact, over the next three years, top strategic priorities for these CEOs included greater speed to market (35% agree), developing new growth strategies (34%), reducing costs (34%), and developing a stronger customer focus (29%).
Often the leaders making the most strategic decisions are the folks furthest removed from direct client interactions. This makes customer insights even more important. As an example, an eConsultancy survey found that 52% of marketers reported that data wasn’t always available to them, resulting in blind spots. Further, 39% complained that data was difficult to obtain, and 24% reported their data was stale.
When customer data is turned into insight, it’s the source of competitive advantage. Data, when used right, can align an entire organization around the customer. It’s about making decisions in real time and grounding those decisions in a real understanding of customer needs.
It might be the case that big data isn’t getting you close enough to your customers if it’s not providing the insights needed to drive decision-making. That doesn’t mean you should give up on being a data-driven organization. It just means you need to flip your process and start small.
Start with the decision you need to make or the problem you’re trying to solve.
A statistician, John Turkey, once remarked: “An approximate answer to the right problem is worth a good deal more than an exact answer to an approximate problem.” Don’t start with the data, start with your growth challenge.
Focus on what really matters.
What type of answers do you need to confidently make that decision? What would you consider vital information to have? Depending on the amount of risk involved, this may be a little or a lot.
Find the right people to answer the right questions.
That’s right, “people.” Your customers. At the heart of every challenge to business growth is a customer making a decision. Who is that customer and how does their choice impact your business? How can you learn about the drivers of that choice? How many customers would you need to hear something from before you felt confident making your decision?
That’s the power of data – driving decisions that lead to action. Start with the end in mind to make data work for you and your business.
You can find the original post, as well as other insights about growing your business, on http://vennli.com/blog