DATA: That 4 Letter Word You Need to Master

I love the analogy of watching a group of kids playing basketball, and guessing whether they are serious or just messing around.  Messing around includes a lot of traveling, behind the back moves, 3 pointers from the park…you get the idea. But when the game is on, it’s clear that things are serious. They are ready to prove that they have mastered the game. Then there is posting in the paint, screens, passing, talking and intensity. And you can bet they are keeping score.
 
  • Keeping score lets everyone know where you are in the game.
  • Keeping score tells everyone if you are winning or losing.
  • Keeping score – nowhere to hide. Messing around or mastering the game?
 
The challenge in business is to decide what you need to measure - what you are keeping score on.  With the onslaught of big data, it is easy to start measuring everything you can. But just like setting goals, you’ll soon find that measuring too much is overwhelming, and suddenly nothing has any meaning and nothing changes.  Like all good things, too much is too much.  You need to find a balance and measure what matters.
 
Data is that 4 letter word you need to master, because:
• Data will drive your business decisions
• Data has the ability to save the company - or sink it if you ignore it
• Data can help you set the company apart from the competition
 
The goal is to get a pulse on your business through a handful of activity-based numbers that are reviewed weekly. This will help you chart the activities and results of what’s happening in your business.
 
Focus on what you want to change. The solution lies in a rhythm of thoughtfully-linked priorities and key performance indicators (KPIs) that are linked to individuals and departments, and back to the company’s priorities/KPIs. This cycle needs to be discussed regularly and published to be seen by all.
 
Start with your leadership team.  Get them involved in deciding what should be measured.  What data would, at a glance, give them insight into what is happening in the company? Make sure your KPIs are SMART. You know what that means…Specific... Measurable... Attainable... Realistic... Timely… and in 13 weeks or less for a quarterly priority. 
 
Include a mix of leading and lagging KPIs:
  • Leading indicators tell you what is likely to happen (i.e., sales pipeline). 
  • Lagging indicators tell you what happened (i.e., revenue or gross profit margin). 
Both are important. 
 
Be patient.  Keep your eye on the chosen data.  If you find that a KPI you are tracking isn’t relevant, get rid of it.  This is a classic rule of less is more.  Find those handful of measures that will help you track, publish and act on. That's putting you and team in the position to go for – and make – those "BIG" shots to reach your goals. 
 
There’s nothing quite as satisfying as “nothing but net” in basketball.
Mastering the use of data can help your team make those types of winning shots in business, too.

Tags: