You want to achieve the highest performance possible when you’re in business. You realize hitting a home run on every initiative might be unrealistic. But you don’t want foul ball after foul ball to go against your company’s record. Some might argue luck drives outcomes, while others say it’s talent.
Yet, it’s the culmination of decisions that usually determine your results. As a business leader, your job is to make those choices for your company and the people who work for you. And everyone who contributes to the organization has snap and long-range decisions to make.
When it’s time to go one way or the other, humans have two distinct forms of guidance – intuition and data. While you can use a mix of both, data has some clear advantages in business-related decision-making. Below are four ways adopting a data-driven approach can benefit your organization.
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At times, your intuition will tell you something’s wrong. You might call it a gut feeling or your Spidey-sense. Regardless, you just know a project’s going to go off track. Or the suppliers you’re negotiating with aren’t exactly on the up and up.
While intuition can steer you away from harmful situations, it doesn’t always reveal why you sense danger. The devil may be in the details, but you may never know what they are. Data gives you the specifics you need to identify what’s amiss.
For example, you sense employees in your IT department aren’t happy. Turnover numbers for the past few years support your gut instinct. But after rounds of conversations with field techs, supervisors, and department leadership, you can’t put your finger on the problem. You’ve tried everything from team building to consensus training to no avail. Turnover is still higher than expected, and you can’t afford to keep losing good people.
With the help of data-driven performance analytics, you finally nail down ways to reduce the department’s turnover. People are leaving because they’re not prepared for the job. There’s insufficient technical training and resources to set the staff up for success. The department’s tendency to recruit candidates without strong technical backgrounds exacerbates the problem. Addressing both areas means your company won’t waste any more time on the wrong solutions.
Why do people argue? Usually, it’s because they have different perspectives and sources of truth. They can also make assumptions based on having distinct sources or none at all. Gossip may be built on speculation and animosity, but it’s often fueled by false information.
In the workplace, transparency influences how employees perceive the decisions leaders make for them. A study revealed 80% of staff members want to know how the higher-ups make decisions. Employees crave open, clear communication. The study also showed 87% of job candidates seek transparency in an organization.
When direction from leadership appears chaotic, it doesn’t do a business any favors. Employee morale goes down while stress levels go up. You might think confusing communication is better than no communication at all. But both result in poor outcomes, including lower productivity and increased burnout.
Decisions made from data can lead to clearer, less all-over-the-place communication. There’s a single source of truth all employees see. Instead of leaders changing direction based on fleeting thoughts and emotions, data provides more consistent, logical guidance. Employees gain insights into why initiatives are coming down the pike and where the company is headed.
You wouldn’t try to implement a savings plan without a budget. And to create a realistic budget, you need cash flow data. How much you earn impacts how much you can spend. Plus, data about your spending habits can reveal where you’re working against your goals. Crunching the numbers shows where you need to make cuts and categories where you don’t have much wiggle room.
Likewise, companies can’t become cost-efficient without data-driven feedback. Work processes may create inefficiencies, exposing the business to avoidable financial risks. Leaders can identify where those inefficiencies exist by analyzing past and up-to-date information.
Maybe you’re duplicating resources, which you could streamline to boost productivity and cost savings. Say you have two software applications that essentially do the same job. One is a platform your digital marketing agency uses to host your website. The other is a customer relationship management suite with the same web hosting capabilities.
Inefficiencies exist because your website’s landing pages are divvied up between the two apps. Your staff doesn’t have the proper training and access to the hosting platform but can manipulate the second application. The data shows you it will be more efficient to use the customer relationship management suite to consolidate your website. You’ll save billable hours with your agency, only pay for one app, and have more control over website changes.
Chaotic communication and multiple sources of truth impact customers, too. It can lead to poor experiences, such as conflicting information and delays in issue resolution. The hallmarks of good customer service include speed, empathy, and personalization.
But if employees don’t have the right information, it’s hard for them to deliver good service. It’s even more difficult if they don’t know where to turn to find what they need. Complicated and confusing resources might also lead to poor customer experiences.
If your employees need a Ph.D. to understand what internal resources are saying, you can bet they’ll hesitate. As they delay serving customers to seek clarification, client satisfaction will plummet. Data can reveal where there are problems with service and satisfaction levels. Providing self-service options, simplifying employee resources, and investing in remedial training may be more efficient.
Decisions determine performance results. While intuition can be helpful, it’s an incomplete form of guidance. You need more objective, consistent sources to choose the best path forward. Data helps explain what your gut instincts can’t tell you. By letting data drive your business decisions, you’ll improve performance, communication, efficiency, and customer service.