Why you need data to make better business decisions

Many managers have become accustomed to relying on their gut instinct. In today's data-driven economy, gut instinct may no longer suffice for effective decision making.

Executives without a natural analytical personality or mathematical background may initially find data analytics technology daunting to learn. Yet, current economic trends have forced many businesses to adapt quickly to rapidly changing markets.

In today’s environment, it has become crucial to rely on data to develop optimal solutions to common business challenges. If you don't, you may be holding back your business.

Driving your business forward with a clear direction

In order to deliver effective leadership, it is imperative that executives and managers provide their teams with a clear sense of direction and purpose. Without this guidance, you may find your team members become overwhelmed, underperform, or even begin to work in opposition to each other; disintegrating cohesive collaboration. This may ultimately convey a message to other employees, or even more disconcerting, to customers that the team may be incompetent.

As the leader, you must first be clear on your business’ key focus. While years of experience may provide intuitive guidance, instincts can often be colored by personal preferences and opinions based on individual experiences. Because experiences are subjective, they often do not reflect a complete overall assessment. It is only with an objective evaluation of the company that a results-oriented focus can be defined. This evaluation must include an objective assessment of market trends to highlight potential growth challenges and opportunities. This singular view is only possible with an unbiased, fact-based analysis of data.

Assigning the right employee to the right task

Another key challenge of executive management is effectively distributing tasks among team members. Traditionally, managers rely on the perceived strengths and successes of individual employees. While this is an important consideration, it does not provide a complete evaluation. As humans, we see the world through the limited view of our own eyes, and we are only moderately accurate when judging the strengths and weaknesses of ourselves or others. A Meyers-Briggs type evaluation is only as accurate as the individual’s perception of themselves. However, using data allows management to evaluate employee performance using the relevant key performance indicators that have been agreed to. An unbiased assessment such as this enables managers to identify areas of improvement, decide to invest in additional training or move the employee into a better suited role.

Generating buy-in from others

Depending on the size and structure of your business, implementing your strategies may require buy-in from others. While it isn't mandatory for a team leader to get buy-in from their team members, providing a logical rationale for following procedures will increase productivity and compliance. As humans, we tend to follow policies we personally believe in and can understand. When your employees know their contributions are valued and successful, they are motivated to continue their efforts as having the experience of success leads to more successful behavior.

Buy-in is largely dependent on the art of persuasion and how well we convince others a particular approach is the best for the business. While persuasion is a skill that can be developed, a great argument includes the presentation of facts to support your position. The reliability of these facts will determine how well your argument is received. Data provides highly objective, verifiable facts provided it comes from a reliable source. For example, spreadsheets are often prone to errors and a possible manipulation of the facts. Therefore, exporting this data to generate graphs may not be perceived as a reliable presentation. However, business intelligence integrates data from multiple sources to present a cohesive and unbiased view of the facts supporting your case.

Managing time

Lastly, many executives are starved for time due to the overwhelming number of tasks required to manage a company. Add to this the rapidly changing economy, as well as the evolution of business technology, and adaptation requires rapid-fire strategic thinking and decision making skills. The most effective way to buy more time is to simplify complicated processes. The trick is to simplify without losing quality as efficiency is not the same as shortcuts.

With cutting-edge business intelligence like Phocas, efficiency is improved without sacrificing excellence. For instance, managers are able to generate reports for themselves, eliminating the need to wait for IT. Dashboards allow executives to monitor key metrics and discover trends by following their train of thought to drill down for deeper insights. Phocas has the added benefit of mobile accessibility. Users are able to access Phocas on any device, whether at home or on the road. Moreover, Phocas doesn’t have the security risks of spreadsheets which may be manipulated, sent to an incorrect email address, or corrupted by viruses.

To see how dashboards and scorecards are effective tools to aid executive decision making, download our free eBook by clicking the box below.