Goldilocks Data

I like numbers. I especially enjoy numbers over time that show me trends. They allow me to make predictions. One critical number in my personal life is my bank balance. Sometimes I don`t like looking at it because I’m afraid of what it’s going to tell me, yet the daily discipline of checking my balance on-line every morning (after grabbing my coffee, going through the web-comic sites and news feeds) has saved me from more than one expensive and embarrassing mistake. Putting off looking at it doesn’t do me any good. It`s rarely as bad as I think it`s going to be, and bad news doesn’t get better with age.

With consulting clients I’ve noticed that if they have problems with figuring out where their business is or where its going, they fall into two categories. They either have too much data, or they don’t have any. Getting buried in data is just as dangerous as having none. Maybe more so. Usually what happens is that a lot of sweat and treasure gets spent producing figures and graph and reports, and then nobody knows what to do with it. So it`s wasted. Even worse, all those figures and graphs and reports give some sort of false sense of security while you drive your business right off the edge of the cliff.

The key is to have a few simple, predictive, telling indicators specific to your business that you update, analyze, and review on a consistent and regular basis. If the number doesn’t pass the so what test, then consider replacing or dropping it.

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2 responses to “Goldilocks Data

  1. Hi Bernie,

    Great blog today. I’ve seen just about every angle of this issue. Two issues that I have noted during my years working in industry:

    1) It is extremely de-motivating for employees to be tasked with endless hours of data collection and report writing when they know full well nobody is looking at and it doesn’t pass the so what test.

    2) Sometimes companies get so caught up beating one or two key indicators to death that they are oblivious to everything else going on. Key personnel are dedicated to tracking down variances in these few sacred indicators while other important areas are neglected.

    It’s a delicate balance but a very important one to find.

    Natalie

  2. Thank-you for your comments, Natalie.

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