Managing with Data
Updated: Sep 1, 2020
“We are data driven!” If I had a nickel for every time I've heard that statement, I'd be a billionaire…and likely not writing this blog! However, here I am writing about using data because most companies are not actually data driven.
So, what does “data driven” even mean? Data driven is not just about a metrics deck and a weekly conference call. Data driven is much deeper, more fundamental… almost cellular. Data driven means that every decision, on a daily basis, is rooted in hard numbers and backed up by consistency and integrity.
Data driven means that even when the numbers tell an unattractive story, they are still the basis for the decisions. In my years working with companies big and small, I have worked with many “data driven” companies - most of which still make decisions based on executive preferences, personal gain, and out and out laziness... because leading and driving with data is HARD!
And my personal favorite, “That number is WRONG.” No, it’s not. A number cannot be “wrong”. A number can reflect an unattractive trend, it can be the result of a bad formula or even compromised meta data…but a number is never “wrong”.
So why do companies run about producing metrics decks and then howl “wrong numbers”? 98% of the time it's because the data has unveiled something unattractive, true (and almost always fixable), yet when the bonus check is on the line, executive after executive will argue about the validity of that metric deck. I have even witnessed executives produce their own 'numbers', seemingly whipped out of thin air to legitimize their claim to success and superiority. And almost always punctuated with, “These are the RIGHT numbers.”
And while the debate ensues on the moral ambiguity of data, money is lost, customers are disappointed, and the truth is burnt at the stake. So how do trillion-dollar companies like Amazon successful manage with data, decade after decade? Three things – Integrity, Consistency, and Curiosity.
Integrity is not just data integrity; it is process integrity. How, when and who pulls data can materially impact the result. The most successful companies require a specific group or role to pull and publish metrics decks. Typically, this role is filled by the finance team or a deemed 'neutral party' but it can be granted to any group.
The key is accountability. When the task of representing the unbiased health of a company is assigned to a group, their sole purpose is to ensure integrity of the data. When formula corrections are needed, or data-pulls tweaked it is the responsibility of the assigned team and no one else.
A close second to integrity, consistency is using the same formula and source data every time. Consistency also incorporates the review and action of the data. Here is another favorite remark, “Yes, we have a metrics deck. But I don’t look at them, who has time…”
A data driven culture reviews the metrics deck relentlessly. Any data driven leader can pull up a current report and tell you exactly what is happening, from floor manager to the CFO. Consistent data leadership means daily, weekly, and monthly data reviews… every day, every week and every month. Scrambling to pull reports and data quarterly or seconds before the big board meeting is data chaos and nothing more. Do not be fooled.
Lastly, yet as just as importantly: Curiosity. The best metrics produced by a sterling process on a daily basis are utterly useless without a call to action. A data driven culture REQUIRES curious leaders. Being a curious leader demands engagement, critical thinking, and enquiry.
A strong data driven leader flips past the summary page, digs into weekly and daily numbers and measures past the decimal. Curiosity doesn’t start with, "Is it Right or Wrong?', it starts with “That’s interesting. What’s going on here?” Curiosity leads to exploration; exploration leads to learning; and learning leads to progress. “Right or Wrong” leads to arguments, stale mates and elaborate number-cooking.
Just about every company in the world can produce a metrics deck… some with fancy pie charts and visualization to inspire… all along advertising “data driven decisions”. But few, very few, can produce rock solid numbers, week after week, and then drive that number to success.
The reason is simple. It's difficult. Driving with data requires a relentless pursuit of the truth and an insatiable desire to improve. Frankly, it is exhausting. However, any effort short of integrity, consistency and curiosity is wasted effort, leads to false hope, favors “right” numbers, and ultimately leads to demise.
Next time a seemingly successful company files for bankruptcy and shutters, look at the numbers. It was there all along; buried deep in a metrics deck, week after week. Likely glossed over in a summary page, spread in an average and or just corrected to the “right” number. Numbers do not lie, humans do.