Too many organizations are focused on simply collecting as much data as they can rather than on how useful that data is.
This is a big mistake.
Yes, businesses have access to more data than ever before, but that’s not the same thing as gaining useful insights from data – the kind of insights that can support decision making and help a business to develop and grow.
In today’s competitive business world, success often comes down to a company’s ability to learn and act faster than the competition. The process of turning data into insights and action is the key to that success.
Focus on Action
Regardless of size, I believe the smartest businesses are those that use data to extract important insights – and then turn those insights into decisions and action. Here are my top tips for making that happen:
Before you analyze any data, be sure to set out your key strategic business questions: Where do you want your business to go and what do you need to know to get there? Understanding exactly what it is you want to know leads to better, sharper insights and to the information you need to make decisions.
Try not to get distracted by interesting insights that have nothing to do with answering your strategic business questions. There may be opportunities to revisit those insights in the future but, for now, stay focused on what you set out to achieve.
Gather all the information you need to answer the questions that will bring you closer to your strategic goals. Avoid the trap of making decisions based on the information you have at hand. If you don’t have everything you need, see if you can amend the data-capture process to get exactly you what you need.
You should arrive at an answer (or a set of insights) related to each question that you set out to answer at the start of the process. If you need to distribute those insights to others in your organization, make sure they are presented in a clear, accessible, and easy-to-understand way, not buried in lengthy reports. (There’s more on this in the next section.)
Together with the relevant people in your organization, you need to take each of those questions/insights and decide how best to move forward based on the knowledge gained. It’s a good idea to break the actions into specific tasks and milestones so everyone is clear about who needs to do what and when.
Revisit the whole process after a few months (three to six months usually makes sense but you may need to do it sooner in your business) to see if the actions you decided upon have been carried out and led to the results you expected.
Get Information to the People who Need It
A big part of turning insights into action is making sure the right information gets to the right people at the right time. What’s the best way to disseminate insights to decision makers? It depends on what data you have, who needs to know about it, and how you usually communicate across the company. You could, for example, have a simple indicator (such as sales, revenue, or employee performance) included in a monthly report that’s distributed to your managers.
However you decide to disseminate the information, the format in which it’s presented will have a significant effect on how useful that information will be. Here are my tips for presenting information in a useful and usable way: eBook: Improving Access to Data Across your Company/Partner Ecosystem
People are less likely to act if they have to work hard to understand what the information is telling them. Present your insights in a clear, concise, and interesting way, and you’ll be making it easier for your people to turn those insights into action.
Data can be presented as a number, a written narrative, a table, a graph, or a chart. The best approach may actually involve a combination of these formats.
Try to present your information as a newspaper would. Include an interesting and informative headline that summarizes the main finding. Then include a useful visualization (such as an image, graph, or chart) along with a short narrative that sets out the key messages and supports the visual.
Remember that using visuals and narrative together is much more powerful than using either on their own. For instance, a graph detailing sales history is extremely useful for analyzing trends over time, but a narrative can put that information into context and explain what might be behind that trend.
It doesn’t matter how much data you collect; data is worth very little unless you can turn it into insights and action.