"Big Data" is one of the trendy terms in business that we've all heard of lately. The challenge of a data-driven strategy in most organizations, however, isn't lack of data; it's just the opposite. The hangup is information overload and finding a way to capture and process what they have.
I recently read the "The Decoded Company" and saw a lot of applicability to the industries we work with, as well as a lot of the projects we've taken on internally and and with our customers. Here are a few of my key takeaways:
1) The Right Data Serve as a Leading Indicator of Success and Failure.
The data that are easiest to collect are those that summarize what has already happened. Things like your sales results for the quarter. The number of accidents you had. The dollar value of your losses. The harder (but much more beneficial) thing to do is use data to predict these things before they happen.
In a data-driven strategy, you need to look for leading indicators of the outcome you're trying to change. Leading indicators are so named because they are the early signs of future success or failure. What behaviors lead to a stellar sales quarter? How do you identify unsafe driving behaviors or high risk profiles before they result in a crash?
2) Data Can Identify Training Opportunities.
Effectively processing your data may help you zero in on what the authors of "The Decoded Company" call "teachable moments." If you can pinpoint at what step of a process you see mistakes being made, you can take those high-risk junctures and take that opportunity to prove just-in-time training to prevent errors from occurring. It's tricky to think through, but with some effort, you can likely identify steps in your internal processes that present opportunities for one-on-one instruction.
3) Data Turns Your Managers into Coaches.
Equipping managers with data is one of the most powerful things you can do. Quantifying workload and capturing objective measures of performance completely change the conversation with a direct report. Rather than providing an anecdotal assessment of how the employee is doing, the manager can show them, including a benchmark comparison of how they're performing compared to their peers.
Putting data in the hands of your managers changes the conversation and positions your manager as someone who's sitting on the employee's side of the table, helping them brainstorm on ways to improve the measurable outcomes that matter to the organization. It creates a culture of accountability and makes it clear that everyone is held to the same standards.
At HNI, we've implemented a data-driven strategy with a scorecard system for our sales team. We are 100 percent transparent with very granular data on our sales process — including number of prospects and opportunities by sales rep, sales to date, average account size, what competitors we are beating and losing to, and more.
We also have a leaderboard that boils performance into a single number. We've identified the most important behaviors for a sales rep to be successful at HNI, and those feed into a formula that ranks reps by performance for all to see.
When sales reps meet with their location president to discuss their results and what they have in the pipeline, their manager is already up to date with what they've entered into the system, and the rep already knows where they fit in the pack. The conversation becomes "How can I help? rather than "How are you doing?"
The Future of Data in Our Businesses
I believe that finding ways to be more data driven is going to be increasingly important for all businesses in every industry. It's certainly not something that can happen overnight, though. It requires a deliberate effort and commitment, as well as employees or partners who are data literate and can help you chart that journey.
Where are you using data (big or small) to improve your business? What barriers do you face in measuring and acting on data? Please share examples of what has and hasn't worked for you in the comments.