Why I Teach Business Strategy through Data

Business Strategy Formulation has many different approaches that one can use as a company. People can use Mckinsey 7s, SWOT, Risk Approach, BCG Matrix and many different combination in coming up with a business strategy. I prefer to use data in order to make a point then we can get into the different frameworks that people like.

Why Data?

Data embodies the character of the business and what it achieves. Imagine you are looking at a retail chain and they are thinking of what is it that they have achieved. The sales for example will contain lots of information on what is popular, when is it popular, which sections make money and more. You just need to look at the trail of data to get the bigger picture.

It is not just about having POS machines at the selling point but which POS machine is making money for you. You will find some POS machines do not transact as much. As a student of Six Sigma I want to understand why one drive inn makes more money than the other and data can easily tell us that.

In most strategies we tend to theorize and conclude from what we think is ideal and ignore the use of data to answer the real questions. If a particular product or service is not making money that is an obvious observation but what is it about the product performance that stands out that we need to understand. It could be that we are using the wrong sales channel for delivery, instead of retail it should be online or direct.

Good data tells us time, clients, method of payment, days, locations, channels, quantity, quality and much more. A company that does not let data give it a hint will always fail to match the operations to the strategy.

Why is Data Ignored?

There are many reasons why data is ignored.

Ignorance

Sometimes data is ignored because management is not aware that data is important. People might be so comfortable in their areas of expertise they never discover that there is more growth out there. A person can work in takeaway and never realize that the data on times and eating habits is the best strategy hint they can ever get which can guide their promotions. They might just focus on quality of food as a promotion and never realize that there is more, it is not just about placing the food in a plate but also placing the food at the right time to the right client.

Techno Phobia

Anything technical sounds fearsome. That can be the attitude that managers take. The moment they hear "technical" terms like Data Analysis or Big Data they close rank and believe it's not for them. In the end the "Big Data" is ignored in favour of more traditional ways of strategizing. Big data does not replace any framework but rather it enhances and compliments them.

Security

Closely related to techno phobia is fear of "losing my job", because a computer can now think better than me. Yet the truth is that the computer is assisting humans for strategy making. People can think that data analysis is not for their generation. When you look at companies like Google or Linkedin, their success is about how much data they have.

No Capacity

It could be that the company has no capacity to review or analyze the data. This could be that there is no tool of trade or skills of trade. In the end the data just accumulates and no one is the wiser on what to do with it. There is a saying that says "Unable therefore unwilling", this simply says when a person/company does not have the capacity they normally ignore the task or strategic activity that they have to do

P.S. Data is a living organism

Data is not to be reviewed at the end of year but preferably daily depending on the throughput of your organization trade. Thinking to wait can lead to missed opportunities. Corona virus has been a unfortunate situation but has been a gold mine for certain companies online and offline business. One needs to continually look to where the data is and what it is pointing to.

Some of the most ignored data types or sources include

• Enquiries
• Requests
• Complaints
• Traffic (online and physical)

Data is everywhere, just ask Google and Facebook, eventually we will all realize that data is a story being told, we jut need to listen and observe.