What executives need to know about data
Sometime between the 1st and 4th centuries something incredible happened. Indian mathematicians invented a system for measuring objects. Arab mathematicians eventually adopted the system, and it was through them that Europe eventually learned about the numerical system we still use today.
Since then, numbers have played an important role in our lives. Statistics surround us, and leaders need to understand the roles of numbers in their organizations. Here are the most important things leaders should know about data – and the things they can safely ignore.
Data can accelerate decisions
The decisions you make as a leader can have an enormous impact on your business. Using data can help you make those decisions faster and ensure you make the right decisions. As you are exploring a new market to enter, data can give you potential predictions of sales and give you an idea of the type of customers in that market.
The quality of your decisions and the speed with which you make them are important. If you look back on the past year, you will find that it wasn’t just about making the right decision, it was about doing it quickly. The whole world came to a standstill in a matter of weeks, and executives had to determine how to remotely work entire companies, how to serve customers, and how to survive.
You can also use data to help your team make better decisions. Managers know they need to delegate, but the actual process is not always clear. The people below you may not have the same confidence or intuition, but they may be accessing the same information. They could use data to guide you to the right decision without your involvement. Better still, they can measure the success of their decisions.
Data is your flashlight and map
Think of a cave. It’s dark, damp, and you can’t see more than a few meters in front of you. You know there is an exit somewhere but aren’t sure how far it is or which path to follow.
It would be nice to know the exit direction, but instead you have a map and a flashlight. And that’s all you really need! Think about how your team will adapt to last minute changes and what type of map to use when guiding through uncertainty. The best leaders can quickly map new situations – and better yet, know when to leave the map and when to follow.
UPS’s new CEO, Carol Tome, came in with a simple idea: “No”. UPS should say no to wrong customers, wrong product lines, and wrong ideas. UPS stock has risen over the past year and is well positioned to grow beyond the pandemic.
I don’t think Ms. Tome knew exactly what could happen under this strategy, but she gave her team a map and a flashlight. She trusted her team to adjust halfway and keep moving towards the exit.
Data can help you measure success
Measurement is important in providing options for identifying opportunities and new ideas – and in determining whether the direction you are taking is successful.
Think about what data you will use to measure the progress of your goals. You can browse reports and dashboards and collaborate with specific people to generate the relevant data.
Also, schedule regular contact points to talk about the dates and discuss opportunities. Which new customer segments appear? Which products or services should you give up?
Innovation must be deliberately thought out and carried out. Check out the UK’s efforts to fund innovation. It is planned to set up a dedicated Defense Project Agency for Advanced Research Projects (DARPA) and fund innovative ideas. We haven’t seen the results yet, but it’s moving in the right direction. Executives are ahead of the pack and try to spot those innovation opportunities.
Numbers have been a blessing and a curse. They have given us the ability to understand our world, but they are not always intuitive. Use data to accelerate your decisions, guide you in the dark, and measure success. Better still, use data to become a better leader for your team.
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Ruben Ugarte is the founder of Practico Analytics and offers expertise in data analysis. He has worked with companies on five continents and at all stages of their business, helping them use data to make higher quality decisions, improve performance, increase profitability and make their teams world-class. He also maintains a popular blog with over 100,000 readers. His new book is The Data Mirage: Why Companies Don’t Actually Use Their Data (Business Expert Press, January 22, 2021). Learn more at rubenugarte.com. * * *
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Posted by Michael McKinney at 6:36 am
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