Data and Competitive Advantage

You need more than data to win.

Is your data and data collection efforts paying off in improving performance?

In today’s society, we are inundated with data. When you have your car serviced, you are presented with a detailed inspection report providing tire tread and brake pad wear, along with a host of other figures about the condition of your vehicle. When going for an annual physical, the report that comes back shows data from blood work, weight, height, BMI, heart rate, and blood pressure. The intent is that you and I will use this information to make informed decisions about actions to take to maintain or improve the performance of our vehicle or our bodies.

In the context of business, organizations are data-rich. Unfortunately, in many cases, that data does not translate into actionable measures. Data is often collected and filed away, only to reappear for an audit or when a customer asks some detailed questions.  Too often the data is not properly analyzed or used to drive actions that improve the performance of our organizations. In some cases, the collection of the data becomes the aim and key measure. This is the “activity fallacy.”

In a recent article from Harvard Business Review, the writers discussed how “an obsession with the numbers can sink your strategy.” Because of a behavioral tendency called surrogation, organizations can confuse what’s being measured with the metric being used. The result is that we collect megabytes of data that we cannot turn into actionable steps to improve our businesses and execute our strategy and destroy company value.

There are several keys to ensure success when deciding what data should be collected and how that data will be used to drive improvements.

Connect Strategy to Data Collection: Know what you are trying to achieve.

What needs to be addressed or fixed?

Seems like a very basic question, and it is. Are you working to close the gap between the plan and actual production results? At first, you may not know if the issue is downtime, material flow, or quality. Ask the right questions and put the correct metrics in place to help understand the situation clearly. And then take action. The collection of data without intent to act on that data is a waste of resources and frustration for your team.

Insure Wide-Spread Adoption: Get on the same page.

What is the plan for collecting and analyzing the data?

Having a wealth of data is beneficial when you have a plan to collect, review, and act on the data. How many times have you received a daily report with data from production, but done nothing with the information? Downtime minutes and causes, quality fallout, and equipment failure data are great to collect. But if there is no process to respond, the data becomes mute.  Have a process for circulating, reviewing, and acting on the data to drive results.

Select the Right Tools: Make it easy to work with.

What process and tools are needed to collect and report?

There are several options on the market when it comes to data collection and reporting. From basic Excel files and dashboards to large software suites that are developed to collect, store, and report, the options cover the full spectrum. Keys to successfully implementing a tool is the ease of integration with existing IT hardware or software. A highly customizable setup and remote access are also important. Program reports should provide data in ways that allow teams to take action, promote accountability, and drive improvements.

Make Sure Results are Beneficial: Measure the gains from the effort.

What results are expected?

Your team will not embrace wide-spread data collection efforts if they see no benefit for the organization, or them. Don’t assume that when your teams collect mounds of data that they will automatically recognize the impacts of what they are doing. Meaningful reporting will show data-driven achievements and improvements. It is important to demonstrate on every level of your organization how data collection and the resulting actions are improving their jobs and the company’s performance.

Conclusion: Flexibility with a plan.

Having a strategy, a plan and the right tools are important to success. But realize that your plan will likely require real-time adjustment as you learn more. Success will require a cycle of PDCA loops as you achieve the success you want. This doesn’t mean you abandon the basic strategy, but rather that you may need to adjust course as you move toward the final destination. Like traveling cross-country, unforeseen obstacles will certainly show up. It doesn’t mean you cancel the trip and turn around.