By November 21, 2014 0 Comments Read More →

Your Data Is Useless Unless it Drives Decisions

Your Data Is Useless Unless it Drives Decisions

If you are like most Managers, you are inundated with data on a daily basis yet not much of it helps you make decisions that improves results.

The problem we all face is having too much data because we know that’s a good thing, yet very little of it enables effective decisions. Often, the data isn’t going to help you. Either it’s not the right kind of data or it isn’t compiled and analyzed properly.

In other words, it isn’t Information, it’s just data. You need information for decision making. The data itself is usually not very helpful as-is. That includes ‘canned’ reports, lists and other common methods your systems generate so-called information for you.

Successful Executives already understand this issue and focus only on information they need to make decisions. To be a better Manager, you need to eliminate the clutter and improve your decision making.

These six things will help you make better decisions:

Collect only Useful Data

Before collecting data, take a step back and ask the fundamental question: Can I turn this data into information or knowledge to help me make decisions that will improve services and reduce costs? When you understand the answer to that question, you will be in a better position to establish what data to collect and how to turn it into information you need to make decisions.

Use Analytical Tools

Use tools to that help you analyze the information and data you have. Export the data from your system if necessary and load it into Excel. Use Excel’s pivot table tool to analyze data and convert it into information. You can use other software or enterprise systems that are designed for data analysis as well. The key thing is to step beyond lists and printouts and start analyzing the data in a way that's meaningful to your responsibilities.

Get Accurate Data

Of course, you need good data in the first place. Make sure you have what you need and it is reasonably accurate but consider how you will use it and how much of a difference accurate data will make in your decision making. Accuracy or detail are also something you need to manage so you don’t end up overwhelmed with detail or spend too much effort getting detail or accuracy that simply doesn’t matter in the end. For instance, if you are tracking costs as part of a process in order to make management decisions, does your tracking method have to tie into the financial system and match to the penny? Does it have to be a live link with your own system, or can you download the needed information from the financial system daily or weekly?

Convert Data to Information

Information is when you take the data you have and analyze it or manipulate it by combining it with other data, trending it over time, assessing or analyzing the outliers that need to be dealt with, and most importantly applying your own experience and knowledge to transform that data into something you can use to make a decision with.

The report, list or print out usually doesn't do it. And dashboards such as the typical stoplight with red orange and green indicators for the speed dial will only give you a point in time. The real value of data is comparisons and trends. Compare the results from one call center agent to the average or to another call center agent. Look at the trend in sales or expenses over time or again some other factor. Assess your response or delivery times against geography, product, personnel, seasons or other factors. And certainly compare both within your organization and outside using benchmarking approaches.

Make Decisions with the Information

Once you have collected and analysed your data and turned it into information, you should assess what matters to your decision. If there is any question about the accuracy or completeness of your data, or you are using historical information to do projections, do a variance analysis - if it was 25% higher, would you make the same decision? What is the likelihood the result would be in that range? How ig a risk will it be?

What parts of the information are important to the decisions you want to make? How will they impact the success or failure of your initiative? How much weight do they have compared to other factors?

For instance, when looking at costs and how you may implement processes, approvals or other methods to reduce them, will you be causing costs to increase elsewhere and what is the real likelihood that you will be able to make the reductions you project?

Solidify Your Business Case

If you are developing a business case using information, you stand a much better chance of getting it approved with solid information that tells the story and supports your argument.

When putting this information into your business case, include some methodology and provide a level of confidence about the information you’ve collected. Consider questions that may be raised about your information, particularly if it points to changes others may not like, and answer them up-front. This may include the reliability of the information, whether it is a trend or an anomaly and what impact an increase or decrease might have on the decision.


About Michel Theriault

Michel is the founder of Success Fuel for Managers. He is an author, speaker and consultant focusing on topics relevant to Managers and aspiring Managers in businesses of all sizes who want to get results, get attention, and get ahead. He is also a contributor to Forbes and AllBusiness Experts . Michel is available for speaking engagements, training and consulting. Connect with him or send an email.

Posted in: Decision Making

Post a Comment