Between 2006-2008, the iPhone, Facebook. Google, Amazon, Salesforce, and several other technology companies started to explode. We are still trying to help management catch up with those opportunities.
On one hand, diverse fields like sports, medicine, budgeting, etc. are all using more analysis to make better decisions. The three-point play has dramatically increased in basketball (statistically shown to lead to higher scoring even if you shoot at a lower percentage), and even restaurants are using new analysis to improve sales and profits.
On the other hand, we also focus on innovation and the exceptional, which is outside the norm of everyday analysis.
While there is better analysis available, there are also more opportunities for mistakes and misuse. There are numerous potential contradictions to analysis. For example, bias, background, history, and fear can affect our analysis and beliefs. We see all the data – but only the way we want to see it. Therefore, it can be used to confirm pre-existing beliefs we may hold.
Our decisions and processes are also affected by the pace and complexity of change. Traditional organizations like brick and mortar retailers are dying while the iPhone alone is stimulating the explosion of new companies and industries. Global diversity and involvement is requiring more collaboration and complexity.
There are numerous free resources available on this topic. Some key suggestions to deal with these issues are as follows:
Write things down and don’t be afraid of numbers.
Many organizations I work with are afraid of writing and numbers and thus fail to understand their efforts or potential viability. Their excuses are that they are working on it, it takes too long, or they have no information.
However, as Yogi Berra once said, “If you don’t know where you are going, you will wind up somewhere else.”
The solution? Complete a simple elevator speech or mission statement and a quick budget. Do it for yourself and not for an investor or customer. Accept that it won’t be perfect, and try taking only one hour on each. It could save you days of going down the wrong path. As you go along you can modify, add details, and make it more useful.
Don’t ignore change and technology as critical requirements.
For example, businesses have multiple goals and realities. Many entrepreneurs are so excited with the idea of becoming the next Mark Zuckerberg that they completely ignore the need to make a profit and execute.
There are many factors that businesses have to contend with besides their overall profit margin – things like skills, success, and the financial planning of the business must be considered. Also, factors like the environment, safety, and social trends are areas where business owners need to consider.
Watch out and monitor BIAS.
Important issues like bias, prejudice, and, yes, even ignorance are also complexities that must be addressed. Business decisions are made by the accumulation of data, by measurements, and by analysis. How it is used, or ignored, can be devastating to a business. Here are some reasons how:
- Seeking information that supports our favored hypothesis and avoids information that contradicts it.
- Giving preference to positive information and ignoring details. For example, we frequently develop huge general market estimates that ignore the specifics of our target.
- Looking for winners, especially in describing startup success stories, and ignoring the failures.
- Ignoring negative evidence. In particular, the more invested we are in a project or product, the less we are willing to abandon it.
Startups tend to focus on universal answers and simple solutions. However, we know that issues are more complicated, and each business needs its own customization. One-size-fits-all solutions are easier to understand and technologically easier to execute. However, if you realize some of the complexities of these solutions, then it can be easy to adapt them to individual situations.
Dr. Bert Shlensky, president of www.startupconnection.net, offers experience and skills and a team devoted to developing and executing winning strategies for businesses of all kinds. This combination has been the key to client success. His book, “Passion and Reality for Small Business Success,” is available for free download at https://www.startupconnection.net.