02 Apr 2020
Why are data working against us? 10 pitfalls
By: Manola van Diest
Big promises, no impact. 10 Reasons why we fail to profit from data
Big promises, no impact
This blog is written by data expert Ronald Schep, one of the first officially certified Salesforce Einstein Analytics and Discovery consultants in the world.
Every self-respecting organization recognizes the importance of data. Just look at the sheer number of webinars, congresses, blogs and open vacancies. They are all underlining the importance of data and promising bright future when working with data. But why do we see so little impact in practice? Too high expectations? Bad data? Wrong tooling?
Based on my personal experience in projects, here are 10 reasons why companies fail to use data to thrive their business.
#1 Focus on numbers instead of the story
As soon as I start presenting facts and figures, people instantly focus on the tiny details. Are they correct, are they complete, what is the source? When it comes to statistics, figures or numbers, everybody has an opinion. People stare at the figures and completely forget about the bigger picture. For example why the data was collected in the first place and what purpose it serves.
Let’s forget about the details and focus on the intent and story. What we can learn from the outcomes, what story can data tell us and what will we do different based on the insights we gained?
#2 Don’t fit analytics into business and processes
I often see managers measure for the sake of measuring. If there is no (in)direct link between metrics and processes, there’s no use in reporting the findings. Sales managers, for example, have dashboards on how many visits each sales consultant makes. What does this metric mean for your business? What is the goal of a visit, and what is the impact?
Try to combine metrics to create impactful analytics and apply them to business process steps. Make clear why you want to collect specific data and what you are going to do with the results. And don't forget to embed the findings in your business processes.
#3 Use of generic reports and dashboards
Data on general topics are not taken personally. If you want your reportings to make impact and really help you grow, make them personal! Persona based analytics can be set up in 2-dimensions:
- persona driven: analytics based on the roles, such as marketing, sales, recruitment
- task driven: reportings combining metrics of different roles needed to get a specific job done
In your reportings, make visible to your employees what their role is in achieving the results. In that way, they feel involved in the process of creation, evaluation and improvement.
#4 Overlook the blind spot
Sure, data resulting from thorough research can provide you with a lot of information. But are you certain you measure the right metrics? Are they the most relevant ones? And what about the factors you didn’t look into? What is their impact on your business?
A historic example exemplifies this. In World War II, researchers examined all returning bomber aircrafts, carefully mapping every bullet hole to determine what locations had to be strengthened in future designs. Sounds logical, doesn’t it? But then Abraham Wald, a famous Hungarian mathematician, claimed that they got it all wrong. He said they weren’t measuring the right things, because these were the machines that survived the attacks (Survivorship Bias).
Same goes for a lot of our researches. Think about search engine research for the most effective keywords to use on your website. A great tool for Search Engine Optimization (SEO), right? But what about the search terms that you were not found on. And what about the data you don’t register?
#5 Don’t integrate analytics in your daily business
To be sure that analytics make the impact you want them to, you must give them a significant position in your organization. Facts and figures must come to live and become vivid steering instruments. Introduce daily stand ups, actively make analytics transparent and discuss them with your team. Why are the statistics here, what do they mean, what can we learn from them and what will be your following actions?
Our customer LINKIT, for example, has screens in the office showing powerful dashboards with real time info on KPIs, which are refreshed every two hours. In quarterly meetings team members alternate in presenting the figures to bring about the discussion and ignite curiosity.
#6 Lack vision on how to use management information
Managers often find it difficult to translate their vision in concrete measurable business objectives. This is the main reason why management information is often misread and has no or little impact. You can compare it with sailing a ship without knowing your destination. Ask yourself why your company is here in the first place and what the dot on the horizon is. Then, determine your current position and map what action is required to reach your goals.
For this, you need relevant information and a clear vision on what role this information plays. Do not confuse reporting with management information. Reporting consist of objective data on clear facts (heading/speed/course). Management information is a subjective advice which helps the board decide how to reach the final destination.
If you want your reportings to make impact and really help you grow, make them personal!
#7 Use analytics as an end-point
Data give you all kinds of interesting information. But this information is completely useless if you don’t turn it into insights on how to improve your business. Analytics are only going to make impact if you use the insights to continuously assess and finetune the customer journey and the processes. Take Coolblue for example. They test every single detail of their website, (e.g. change the color of an 'add to basket' button from blue to green or change the location of the button), they evaluate every new idea and adjust their processes based on the findings. This constant search for improvement is a significant part of their secret of success.
#8 Use reports and dashboards and stop thinking
Cold metrics are likely to give us a false feeling of security and control. Oftentimes, people focus on KPIs and dashboards as a goal instead of a starting point. Dashboards with key data are useful, but only to trigger us to ask further questions. What do these data mean, what causes can be determined, how were they affected and what may be the consequence?
If you look at data with an inquisitive, curious mind and you start looking for explanations, then data will tell you an interesting story full of insights and opportunities to grow. Reports and dashboards need to be a starting point for the curious investigating phase.
#9 Confuse metrics with KPIs
When we talk about analytics, there’s often confusion between metrics and KPIs. A KPI is a Key Performance Indicator. This is a measurable value that shows how crucial business objectives are met. A metric is a clean, quantifiable point of measurement that is used to assess the status of a certain step in the process. Therefore, a KPI can consist of a number of metrics.
Since KPIs are key indicators, don’t step into the pitfall of installing countless KPIs. I have seen examples of 30 or more KPIs in a single dashboard. To make a KPI work you need focus and alignment. Determine 3 (and max 5) KPIs that are crucial for your business and make sure they don’t contradict each other. Also make sure you know what actions to take in order to influence the KPI.
#10 Raising the threshold by keeping analytics in a separate tooling
It is important to discuss/show/view analytics on a regular, or even daily, basis. But it is difficult to make intensive use of data when they are kept in separate tooling. Analytics make huge impact when they are showed directly in the location in which the user is working. For example Salesforce Einstein natively embeds analytics in the tooling, so it gives you instantly real time, applicable information. You can directly adjust the variables and see the impact it has.
A nice example of this is our own practice at Talent Peaks, where we have a dashboard which every consultant can easily see who works on what project for how many hours. If a project is not correctly scheduled, a consultant can adjust the data in the same application without switching apps. Right in the heart of our primary process of scheduling / writing hours / checking and billing.
Make data valuable
We see a lot of missed chances when it comes to making data valuable. Using the tips from this blog will help you to take steps to really embed analytics in the day-to-day business of your company. And this will most certainly pay off in every way you can imagine. It will help you grow, increase profitability, enhance customer satisfaction, engage your employees, you name it. Analytics should be at the basis of every change you want to make.
How do you improve your business?
What place do analytics have in your company? Do you make optimal use of facts and figures and how do you turn data into valuable information that will thrive management decisions? Feel free to contact us anytime. We’d love to show you how data can impact your business!