Why your opinion doesn't help my business
Most of this explains hour long meetings with no decisions taken. It also explains how half baked features get introduced in products, and how hard it is to make informed decisions about anything.
When decisions are based on opinions, Product direction is likely to be determined based on the power equation of the person requesting for it . This is way more hurtful to an organization than not having your opinion heard.
Any business that takes itself seriously should seek to measure progress / blockers, and use that data to back their decisions.
When leaders don’t set an example to gather data, back suggestions with data, explore insights, and actively track metrics, they will create a personality driven organization. Being a data-driven business requires a change in mindset, getting over fear of failure, learning to let go of control, and embracing transparency even when what you see isn’t something you like.
Here are my recommendations for small businesses to get started on their data journey
Start smallThe idea of tracking data gets us thinking about large screens showing minute by minute tracking of every user action. Well, let’s not get carried away. Focussing on the optics alone will freeze you in the tracks.
Start with 5 KPIs that will give you an indication of the health of your business. Sales made ? Leads acquired ? Repeat customers ? Start somewhere, and then build on it. Evaluate and discard ones that don’t seem to add value to your decision making.
Write those up on a white board, and track them daily. I know it sounds so old world and boring. But it gets you started at near zero cost.
Many times people start with big ambitious plans and then they let it fizzle out. Your data strategy will likely go that way, if you don’t nuture it. Be fanatic about backing every decision with data. When there is no data available, go seek data first.
Encourage teams to seek rationale, gather data, back their own suggestions with data, to explore insights, and actively track metrics. Of course, when there isn’t enough data to support don’t spend endless hours debating between 'your opinion' vs 'my opinion'. A/B testing, simple experiments can help you quickly validate an idea without high investments.
Ease of Access
One of the primary bottlenecks for the business operations is the lack of access to data. At first glance it may appear as if teams aren’t asking for as much information as they should be. But usually business teams depend on the developers to come up with SQL queries to get them the kind of data they might need from time to time. However, the friction of asking for this, wondering if their request for data might hamper software delivery etc. usually holds them back. Trust me, everyone is thirsting for data.
Providing unfettered access to data is important. Simple data visualisation tools that can be utilised by business without depending on a developer to run queries can solve this. Even having a dedicated data team can clear up the bottlenecks. For instance, we used Zoho reports to setup up basic reporting for the teams at Rang De.
Share and question
Once business teams have access to data, encourage them to share. Hoarding data and creating islands of data isn’t the best strategy. It creates bottlenecks, builds isolated views of business and doesn’t help in cross-functional efficiencies. Encourage your teams to share any data they measure. Encourage your teams to question the data.
For instance, marketing teams may have the biggest visibility on the profile of leads, and which ones are the most promising. Why have the product teams build in the blind for the wrong target segment ?
Embrace and encourage transparency.
Good data vs Bad data
Once you tasted the sweet success of data driven decision making, you’ll end up loving it so much that every piece of data suddenly seems important. Resist that temptation.
If there's one thing that's worse than having no data, it's having the wrong data. It is quite easy to get misled by having data that has no relevance to the business outcome.
We’ve all succumbed to availability biases (the most recent memorable incident clouds our view), using anecdotal evidence as opposed to hard data, relying on correlation instead of causation etc.
When 5 customers (out of 15,000 customers) expressed displeasure about the new layout of your newsletter, don’t call for a frantic redesign / roll back discussion. Not yet. Measure engagement with your newsletter. Track analytics on the CTAs in your newsletter. See if there is a drop in conversions. Send out a survey seeking feedback. Gather data. Get over your instinct to panic and fault your designer. :)
Would love to hear your thoughts.
PS: I recently read the book “Winning with Data” (https://www.amazon.com/Winning-Data-Transform-Culture-Empower/dp/1119257239) and could relate a lot of what is written in the book to my experiences working with small businesses. That’s what inspired me to share my thoughts on the topic. It a good starter for understanding the power of a data driven culture.
Image Attribution: Edvard Munch [Public domain or Public domain], via Wikimedia Commons