How do you find the truly essential nuggets of information and use them with confidence to effectively grow your business and distinguish yourself in your company?
We live in a time when information is exploding and often feels invasive or intimidating. In reality, we are fortunate to have this staggering amount of information at our fingertips, but we need to master the fire hose of information. Information is essential to making intelligent decisions, but more often than not, it simply overwhelms us. One fundamental truth is that you are not going to stop the flood information: thus, you must learn to embrace it and develop a personal toolkit to use it to your advantage. Managing data overload does not mean avoiding information. It means using the data you already have differently.
With more data comes the feeling of, “How do I make sense of all this? Can’t we break this down into a handful of simple points?” Critical questions about market demand, customer buying behavior, subscriber acquisition, brand positioning and your product’s roadmap are great. However, the interesting discussion comes to a screeching halt when the data arrives. Instead of being a well-arranged piece of music, it ends up being a mash-up of sounds. The volume drowns the substance.
The question isn’t how to stop the deluge, but how to get real value from it. How do you find the truly essential nuggets of information and use them with confidence to effectively grow your business and distinguish yourself in your company? The answer starts with understanding the different types of information.
Five ‘V’s of Information
Data comes in many forms today and it is critical to understand the 5 Vs of information. While we might be impressed by the volume, variety and velocity of information, we must build skills to deal with data volatility in cases where it is incomplete and the verity of information where we must question its truthfulness. So, today’s challenge is not to just capture the information but to use it to make effective decisions.
A key skill to develop is an approach to distinguish between meaningful and meaningless data. Business people need the rapid response tools and skills to enable them to get to the bottom line of any business challenge. By learning the right techniques, any organization will make faster, more productive decisions.
Against this landscape we must also consider how we invest our time. More often than not, businesses wrestle with the discovery of information. And yet it is the interpretation and decision making around that information that yields true results. In the past, businesses were asked to report descriptive statistics — how many clients were served; how many products were sold; total revenue per client. Today there is an ever-increasing focus on results and outcomes. With increasing frequency, business initiatives must demonstrate they are achieving intended outcomes. To do this, you need easy access to meaningful data, with the flexibility to interrogate the data and make informed decisions around issues that may not have been evident just a day ago.
Therefore, as a business professional you must understand how to consume and process this information when it is coming at you in many forms. Are you taking an analytical or creative view of the information? Are you seeking to inform or compel? Put your data in perspective to derive value and draw insight. Ask yourself what you mean to accomplish with the data.
The 24/7 data explosion around us is both troubling and addictive. The question isn’t how to stop the deluge, but how to get real value from it. How do you find the truly essential nuggets of information and use them with confidence to effectively grow your business and distinguish yourself in your company?
The answer, ironically enough, is found in asking questions. The smartest person in the room is the one that knows the questions to ask to separate the wheat from the chaff. This leads to discovering relevant facts, developing insights and delivering them with impact. Adapted from “Drinking From the Fire Hose”(Portfolio/Penguin, September 2011), below are three questions to ask yourself whenever you are suffering from information overload:
Ask “What Surprised You?” to Foster Dialogue.The key is to foster real dialogue, so try asking your colleagues, “What surprised you?” At first you may not get a response but press the point and wait for new information to surface. Why? Because surprise is a bias killer. Surprises make people think differently. This question will spur new discussion, uncover fresh learning and lead to new insights that separate meaningless facts from relevant information. The question exposes outliers in the data, draws connections between seemingly unrelated conclusions and opens different avenues of discussion with your colleagues. We must get in the habit of looking for things we don’t expect.
Ask “Should You Believe the Squiggly Line?” to Counter Short-term Thinking. Short-term thinking can be fatal to businesses, especially those focused on quarterly reporting. Businesses will often zero in on small, quantitative short-term improvements when assessing macro, strategic issues. While they may be statistically significant, are they meaningful? An over-reliance on short-term data to make long-range plans is like using a magnifying glass to look for something on the horizon – you can see the little details but that doesn’t allow you to see anything down the road.
Relying on short-term data is not just misleading – it also robs you and your business of the continuity and equilibrium on which long-term success depends. The most effective way to discuss results is to consider just three factors: the absolute score, or today’s numbers; the competitive score, which is how your company is doing relevant to its competitors; and the score over time, or how you are faring against your competitors over the long-term. This is true from Wall Street to Main Street and across all industries. By triangulating these three easily measured data points, you can gain almost all the perspective you’ll need and ensure that you don’t get hung up on short-term thinking.
Ask “Who are Our Swing Voters?” to Revive the Customer Conversation.Successful businesses generate additional revenue without incurring new marketing costs. This simple but powerful maxim is the key to driving profitable growth. It is important to know this and figure out how to apply it to your business. Popular wisdom states that neutral customers do not matter. Businesses typically focus on expanding wallet share at their extremely satisfied customers (which often yields no new revenue) or selling to their critics through competitive win-back programs (who may never switch to your brand or will only migrate over a long period). Yet, winning the neutral customer – or swing voter – can be the most cost-effective method for driving immediate growth.
To find your swing voter customer, first categorize your customers as favorable, neutral or unfavorable; then further segment your neutral customers within categories as leaners, neutrals or defectors. The objective is to identify the neutral customer who can be influenced, and then putting a specific plan in place to gain that business. This could yield the greatest potential for low-cost growth by locking in customers who were on the fence.
The Role of Intuition
What happens when results don’t fit people’s expectations? Rather than asking themselves if the results might be accurate, they debate the way the data was collected, analyzed, or presented. They challenge the findings, question the approach, and object to your conclusions. Of course, this same sort of scrutiny usually doesn’t occur when the results are aligned with everyone’s expectations, or indicate the success of a program. In short, if the data is positive, the program is brilliant; if the numbers are negative, there must be a problem with the way the data was collected. For that reason we need to get in the habit of looking for things we don’t expect or, put another way, to ask ourselves what, if anything, surprises us. But surprises are hard to spot when you’re busy managing data overload. It’s a whole lot safer just to keep a tight grip on the Fire Hose, even if the majority of the numbers blow right past you before you can even get a look at them. It’s physics, not a conspiracy—just one more unanticipated consequence of data overload. In order to keep the Fire Hose from whipping right and left, we just try to stay on our feet and do everything we can to keep the data stream pointed in one direction. And after a while we get used to treating any data that sprays too far to one side or the other as an outlier, or a mistake.
In any hundred scraps of information, ninety-five will be of little consequence. In fact, you may feel lucky to find four or five that are really critical. These four or five are the insights that will enable you to use your business acumen to keep your projects on course. Without the insights gained from those four or five pieces of information, you’ll be forced to depend on instinct. And with unfiltered data streaming past you, it’s easy to miss something—until it’s too late. That said, data is still only a supporting character in any business. Information and insights won’t make decisions for you, but they will orient the conversation and help you establish guardrails. The trick, then, lies in not confusing any of the ninety-odd factors with the truly critical information needed to successfully go to market. By continually tracking the data that really matters, an effective leader can set a course and stay on it. Or, looked at from a different angle, a hundred different factors may affect the course a business owner sets to bring forward a new initiative. These may include the market direction, the depth or complexity of the business solution, the unknown delivery challenges for your new endeavor, surprising economic shifts that prevent a viable business case, the presence of other competition, and the visibility of other strategic or tactical market factors that hinder progress. This sort of data provides navigational guidance, rather than a warning.
The key then is to blend intuition grounded in your business acumen with the data validated through real interrogation, which yields focused views on what you really need to keep your business humming and allow it to grow.
Communication and Action
Great leaders inspire action. Leadership can be exhibited by driving your business through the progression from raw data to organized information to quantified intuition and insights and then finally to influencing others to act. Your influence is based on your power base (are you the focal point, the expert, or the gatekeeper to the facts) and your platform from which to communicate. To maximize influence, know your ability to inform or compel to drive a desired outcome with each fact and decision. Understand your ability to influence decision-makers, key peers, allies and adversaries who can impact your efforts.
Your game plan to communicate and influence action begins with framing the issue using effective questions. Then assess your platform and power base to deliver that message. Define the emotional and rational benefits to your business proposition. And align with those who complement or boost your influence to get your initiative supported.
The most effective use of data is to be selective in what you show and leave the rest on the cutting-room floor. Because no matter what data you have, and for what purpose, the numbers you worked so hard to get are just means to a wide variety of ends. They might help you focus on the essential business question, but only so you can answer it. They might help you find your customer’s north star, but only so you can follow it. They might warn you that you’re developing long-term strategies based on short-term results, alert you to a potentially game-changing surprise, or to help you identify your Swing customers.
The smartest person in the room is not the one with the answer but the person who asks the most insightful question that sparks fresh thinking. By posing the right questions, you can unlock radical new learning to make better decisions. Data is just a means to an end. But in our data-driven world, almost all of us seem to have lost sight of that. To regulate the fire hose of information streaming across your desk, consider asking smarter questions to reveal better answers, and be the catalyst that changes the dialogue in your company and with your customers.
About the authors
Christopher J. Frank is vice president of business-to-business and communications research at American Express, and Paul Magnone is vice president of business development and alliances at Openet Telecom. They are co-authors of “Drinking from the Fire Hose: Making Smarter Decisions Without Drowning in Information” (Portfolio/Penguin, September 2011).