Data is NOT a bad word ...

The market is exceptionally slow.

The market is incredibly busy.

I have no idea about the market's current state.

These are all statements I’ve heard over the last few weeks from folks in the building materials / construction industry. And the kicker? They are all in the same general area/market sector. Crazy.

Why do operators in the same geography, market, and industry see things so vastly differently?

The answer? Noise. And I’m not talking about good noise like Motley Crue doing a sound check, but rather bad noise from the plethora of different inputs we get on a daily basis – the business channels, the general news, vendors, competitors, customers, internal sales people, internal vendor relations people … the list goes on and on.

Everyone has an opinion. Some are valid. Some are not. Some are just wonky.

So, the questions becomes … how does one truly get a feel for their market and capitalize on opportunities while ignoring the noise? Simple – become “data driven.” If I’ve had the pleasure to work with you … I can already see you rolling your eyes and covering your ears. ??

Here’s the deal – everyone has, and is entitled to, an opinion. However, their opinion is just that – an opinion – which is defined as “a view or judgment formed about something, not necessarily based on fact or knowledge.” It’s important to digest the last 7 words of that definition - not necessarily based on fact or knowledge.

Story: A good friend of mine and I both share a deep love for the Cleveland Browns. His strongly rooted opinion that the Cleveland Browns are the greatest football team to ever take the field is one that I believe as well, albeit for different reasons.

His rationale: They are awesome and have a better record than people think. When asked to state their record or the teams they are better than … he decided to grab a Coors Light and switch the subject to Indians/Guardians Baseball.

• Fact: Cleveland is 127-258-1 since returning to the NFL in 1999.
• Fact 2: I love the Browns. They are dead last and have the worst cumulative record since 1999.
• Fact 3: I'll send a prize to the first person that tells me who has the best NFL record since 1999.

My rationale: No matter how bad the Browns are, their games are almost always sold out. In fact, in 2021 they were the #1 team in the league, based on attendance percentage, despite many years of being one of the worst teams in the league.

• Fact:

So, what's the difference in our thought processes? My friend forms his opinion based on emotion and the input of other talking heads, particularly his fellow patrons at his favorite Cuyahoga County watering hole, while mine relies on research grounded in facts - aka, data.

The same principle applies to business. The talking heads will convey what their advertisers, influencers, and leaders want them to promote – aka their agenda. It's akin to a crossover between "Succession" and "The Morning Show."

Now, understand that these inputs are valuable to assist you in shaping your own opinion. However, you need solid facts – or data – that can either bolster or challenge your viewpoint, enabling you to devise your strategy.

Does it sound difficult? It's not.

Does it sound simple? Well, it’s not, either.

Let’s come back to three folks I quoted at the start of this piece of literary excellence:

• The market is super slow.
• The market is crazy busy.
• I have no idea what the market is doing.

Three operators. Three vastly different points of view. And zero supporting facts.

Here are the facts for their market:

1. Their public competitors realized increased sales / earnings in Q2 and expect more growth;
2. Non-residential construction spending is at the highest level it’s been in years;
3. There is 13 months of construction backlog reported, up from 11.5 same time last year;
4. Each of these firms realized double digit productivity gains (think units, not dollars) compared to the same period last year.
5. Two of them saw competitors either get acquired or close due to poor cash management, not market conditions.
6. Single family housing is still raging. Existing homes sales are not.
7. While they are all clamoring for labor … all three of them do not have an “immediate need” for more people.

Once I shared this data with them … two of them were at ease that their panic was not substantiated. The other (my market is crazy busy) was relieved that he guessed correctly … and realized that he was struck by luck. He then bought a lottery ticket - and lost.

Here's the moral of the story: Listen to the opinions of others, but refrain from treating their thoughts as facts.

Facts are essential. Take your time and get them right.

And when someone challenges you for relying on facts rather than the latest message from the Mickey Mouse Business Channel... just use this line:

"I don't want to f*ck you up with facts... but...", present your data-driven facts, then just listen.

Trust me on this one.

You'll rest easier, your business will succeed, and who knows, you might even thrive in an unpredictable market.