Data Driven Decisions
Less is more. It really is.
That’s what I learnt over coffee, notebook open under dim lighting in a restored art deco café in Sydney recently.
I was with a consultant to our firm. He’s also a client, a tech start-up co-investor, and a mentor (hopefully he feels the same way!!). A large international public company had asked for help to implement an accounting system, designed to improve their reporting framework. I had the vision; he was going to help on delivery.
Very simply, we focus on the Systems, Processes and People that bring the most reliable and relevant data to clients. The burning question was how could we add the most value to this new client?
We were excited. There was an abundance of potential information to be collected about this client’s business - financial and non-financial, and all captured on the client’s newly developed dashboard. So, unprecedented real-time access to information about how the business was operating. I was suggesting all types of data to capture, including social media activity, website traffic, client appointments, staff phone calls, etc. My mind was in overdrive. I knew this would be a jaw-dropping moment for our client!
My colleague was less excited.
He kept asking: "How do you know?"
I was deflated. "Sam, you are chasing the loose ends,” he cautioned. "How do you know there is a direct link between the number of Facebook posts, website traffic, client appointments, and all-important revenue?"
The answer was I didn't know. Nor did he. Nor did our client.
In the current environment, where SaaS (Software as a Service) products are in cheap supply, real-time data is achievable for all business across the spectrum, not just the big end of town. Big data is now a reality for any business. It’s readily available. In fact, there’s data overload. The key is to decide what data isn’t important.
In order to generate most value for your business, you must close the loop between observation, correlation and action.
Always start with the end in mind. What is your ambition? What are you trying to achieve? What does success look like? And, by when?
For example, if I want to increase the average CLV (customer lifetime value), then I need repeat customers. Therefore, my biggest priority is to engage existing customers. I will initiate a "Refer-a-friend" campaign that gets my customer a 20% discount. Observation, Correlation, Action.
- Observation – Historical result
- Correlation – Lead indicator to lag indicator
- Action – Activity breeds results
Steve Jobs famously said:
“People think focus means saying ‘yes’ to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to 1,000 things.”
Data is exponentially available to us. It's what you do with it that makes it valuable - you must generate action, and then you can measure the reaction. It all starts by being clear on what data is relevant, and what is not.
Then you have a meaningful platform for insights and actions that can be measured. And remember - things that get measured get done.