The Right Balance of Data + Context = Better Business Decisions

You make decisions every day, almost constantly. It's estimated that the average adult makes more than 35,000 decisions per day! That’s about 2,000 decisions per hour, or one decision every two seconds.  

That’s A LOT of decisions. Business leaders, by the very nature of their role, make BIG decisions. In turn, these decisions will go on to impact other decisions.  Here are ten of the most common big decisions business leaders regularly make:  

1. What markets or customer segments to pursue 
2. What new products or services to create 
3. How to best serve customers 
4. Where we can expand our footprint within existing customers 
5. How to outsmart the competition 
6. Which suppliers or partners to choose 
7. Which people to hire or fire 
8. What strategy to deploy 
9. Where to improve performance 
10. Which processes need revising 

It takes more than gut instinct and prior experience to make vital decisions related to each of these.  

Decide with Confidence and Have the Data to Support Your Choices  

You need hard facts. You need data. Yet most business leaders find themselves drowning in more data than they know what to do with. It’s no wonder we find leaders reverting to trusting their gut with a few discernable insights thrown in. This is certainly one approach.  

IBM’s research found that top-performing organizations are twice as likely to use data analytics to guide day-to-day operations and future strategies. The bottom line: when making key business decisions, successful business leaders pay as much attention to insights derived from data as they do their gut. Integrating insights derived from data increases the degree of confidence in your decisions. Data-derived insights help confidently explain your decisions.  

Balancing experience, intuition, and gut feel with data is critical in a world that has become increasingly more competitive and in markets where customers own the buying journey. The more competitive the market and the more complex the buying journey, the more important it is to start with the data and use analytics to provide business insights to support decision-making.   

What You Need: Tools. Techniques. Skills.  

We have found that top-performing organizations leverage three critical capabilities:  

1. The right tools. Tools that will visually portray your company’s data-like attribution models and dashboards. The investment in any tool should result in being able to recognize patterns and take action to achieve the expected outcomes successfully. This depends on successful deployment. A topic that is worthy of its own article.  
2. The right techniques. Tools are only valuable if you have the second capability: the right techniques. Techniques such as scenario analysis, customer journey mapping, segmentation modeling, ecosystem mapping, and others, to make the customer and market insights and competitive intelligence come alive. This critical capability deepens understanding of the data to inform strategic choices, priorities, and investments.  
3. The right skills. Of course, these first two require the third: the right skills to make your team truly excellent. Skills are the backbone of operational excellence.  Recognizing and applying the insights derived from the data is the final step in making key decisions.   

With these tools, techniques, and skills, you can turn complex analytical data into insights that are easy to understand.  

Looking at Data within the Big Picture: Context is Key to Profitable Choices

Gathering data is one thing. Applying it is another. In his book, This is Marketing, colleague Seth Godin writes, “we don't make decisions in a vacuum – instead, we base them on our perception of our cohort." I would add the value of context to this observation. While it is important to account for meaningful groups, circumstances serve as a critical factor in defining the decision being made as well what data to use when making a decision.  

Just as you can’t randomly jump into a movie and understand the plot, you can’t randomly interpret data without context. Context puts things into perspective. It determines what relationships among the data are important.  

Because context impacts how we perceive reality, it is critical to our decision-making process. Changing the context can lead to substantially different outcomes and decisions. Consider and provide context as part of analyzing the data to support the decision-making process. For example, how might technology trends, economic indicators, new legislation, changes in policies, competitor moves, customer buying patterns impacts how you might interpret and use data?  

Decisions can be overwhelming and constant. Business leaders often fall into the trap of making crucial decisions off the cuff or without an understanding of their larger implications. By incorporating and understanding data and its context, we can make decisions confidently and with the assurance of the tools, techniques, and skills to implement them into practice.