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Data and Information January 2, 2010

Posted by Tim Rodgers in Management & leadership, Process engineering, strategy.
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Happy New Year!  I don’t know anyone who thought 2009 was a great year, so here’s my wish for a better year in 2010.

I’ve written before about the importance of making decisions based on objective data, see Measuring performance and Data Driven. I don’t think managers and leaders should wait until all the data is in before making a decision, and I certainly believe there is a lot of value in intuition that’s grounded in experience and mature judgment. However, leaders should avoid making “verifiable assumptions,” and look for ways to validate their judgment using independent means, or risk basing an entire business strategy on an unsound foundation.

Unfortunately some organizations spend far too much time collecting and reporting data, often without any real understanding of what it all means, how the results can be used to guide their strategic thinking, or even why someone thought these metrics were important in the first place. People in these organizations may dutifully send daily or weekly or monthly reports to management, assuming that somewhere someone will make sense of the data and take appropriate action. Managers can unknowingly contribute to this problem by requesting more data, perhaps believing that if enough numbers are available, then the right answer will magically appear.

Any data that is routinely collected and reported should be tied to operational performance measures that have been previously defined and linked to higher-level business objectives. Everyone in the organization, not just the high priests in upper management, should be able to understand and interpret the data, turning it into information that supports decision making. And, perhaps most importantly, lower level contributors should be granted the appropriate authority to act on that information, not just pass the data along to others.

Finally, if the numbers aren’t being used to help manage the business, then they’re probably the wrong numbers. Figure out the right ones, and stop wasting everyone’s time.

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Comments»

1. Greg Rhoades - December 22, 2010

Great points on understanding why you are collecting data and linking them to operational metrics. Having worked at HP and hitting the 63k line limit on Excel, I understand data overload. In my current company, I started from scratch with zero metrics and data.


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