Posted: Aug 12, 2019
As the volume of data coming at us each day continues to expand, the challenge most organizations face is focusing their team on the information that is most important to their business goals.
Many large companies take the approach of measuring as much as possible and then spending time parsing the data until they find a correlation or pattern they think is worth pursuing. This approach is extremely resource intensive and often companies don’t get past the first step of ensuring all this data they are collecting is accurate and trustworthy.
The approach we prefer at Pontem is spending more time upfront defining exactly what you want to measure, why it’s important to your business, what action you can take with this information and then consistently tracking these handful of metrics. If there is not an action associated with what you are tracking then it may not be worth the effort. This consistent tracking and comparison to targets or historical numbers is so important when trying to drive business performance. It allows all team members to understand expectations and how pulling different levers results in changes to results. A mixture of leading and lagging metrics provides the most insights into different impacts.
In a construction example, it’s important to know if the average productivity of your technicians is because of large variances that have averaged out or truly consistent performance over time? We quite often see adhoc reporting that captures a snapshot in time and this often leads to more questions than answers as people try to recreate the past and guess why the numbers look a certain way. This type of discussion creates an environment where confirmation bias is likely to occur. A more regular tracking of consistent information is what can open the door for businesses to begin taking advantage of:
- Data Storytelling – research has shown using stories to illustrate key points are much more likely to stick in people’s memories
- Actionable Insights – the impact of pulling different levers in your organization can now be understood as outcomes of different approaches have been documented
- Accurate Forecasting – a strong understanding of how different choices affect your business means advanced analytics will allow you to forecast future outcomes in a much tighter range
- Improved Processes – accurate and consistent data do not happen by accident; a process to make sure this occurs is necessary, however the good news is these processes are usually not complex, you just need to have them in place
- Data Innovation – once information is consistently measured, your organization will be perfectly positioned to take advantage of machine learning and advanced predictive analytics
Any organization that is able to consistently track accurate data will have a significant advantage over their average competitor. This competitive advantage will only expand over time as this data opens the door to innovative approaches such as machine learning.
What can be done in your business to move you further down the road of data driven innovation?