Businesses are tuning into the wealth of information hidden in the data around them
Words by: Jayadev Menon Image source: pixabay.com
During World War-II engineers were looking for ways to strengthen the critical parts of fighter planes that were constantly under fire from ground-based anti-aircraft weaponry and from enemy aircraft – the mandate was to find ways to enhance protection for the aircraft from bullets and shells.
Studying the aircrafts that returned after sorties into enemy territory one engineer came to the conclusion that the tail portion that housed the rudder would need more reinforcement because that area had 1.9 holes per square foot whereas the nose area, where the engine was mounted, only had 1.1 bullet pierce marks per square foot. The second engineer looked at the same data and came to a different conclusion. He said:
“We are only seeing the planes that returned safely. Probably the only that got blown up or crashed would have had more ruptures in the nose area and they didn’t survive for that reason.”
As at war in business too, often times the inability to see the big picture can lead to poor and potentially debilitating decisions.
What is developing?
Kodak was a global leader in photography products – negative films, photo paper and chemicals were their money winners for decades. Their order books were overflowing and sales registers were ringing all the time. But, often too much success makes companies blind to facts. In the 80s and 90s, they couldn’t read in their numbers the erosion of revenue and profits, firstly on account of cheaper films and processing chemicals sold by Japanese competitors and later due to the rise of the dangerous monster called digital photography.
The unkindest cut being that digital photography was invented in Kodak’s laboratories but they felt that customers would never switch to this inferior technology. They hadn’t foreseen the improvement of digital technology or the changing customer needs.
Kodak definitely had misread the numbers and paid a huge price for it.
Where’s the data?
It may be shocking to learn that a whole lot of businesses operate without data. In many cases, the information is available under their roof but it isn’t in a form that can be easily sliced, diced and studied to reach any conclusion. Many small business owners still store critical data on paper.
Yes, the Income and Expenditure data goes into the accounting software – bills paid and invoices raised. That’s and information regarding inventory, manpower and their emoluments too are recorded because it is a statutory requirement. They don’t want trouble from the taxman or other Government departments.
But, ask them about Voice of the Customer, Production Runs, Employee Satisfaction, Department-wise Rework data, Marketing Spend, Effectiveness of Sales Promotion Campaigns, Employee Productivity, Complaint Turnaround Time and you would draw a blank.
Many businesses, even in this day and age, operate without a plan. That makes the non-availability of data a minor sin, right?
Where are you headed?
If you don’t know where you are going, any road will get you there.
It is important for business owners to know first where they are headed.
Jayadev Menon heads AKSH People Transformation, a consultancy that focuses on Talent Development and Business Transformation. He is a consultant, trainer and public speaker. Adventure Sports and Birding are his passions. He can be reached at jayadevaksh@gmail.com
- What is their short and long term, or at least medium term goals?
- What are the performance targets for men and machines?
- How will the fund be deployed and what returns are expected?
- How will the customer be served and how do we ensure that they are satisfied?
- Are people trained and working at optimum levels?
- Are the right machines and process deployed? Are they running optimally?
- What are the key indicators of success and are they being measured periodically?
On top of their data
Global names like Amazon and Google are absolute wizards in using data to create amazing Customer Experience. Netflix knows which type of films would do best in any particular market or among a particular target group, Starbucks studies the market before deciding the location to open a new store, electronic sensors are used inside the turbines made by General Electric and inside engines made by most automobile majors in order to study performance and then make changes in order to improve them perform even more efficiently.
In India, many of the leading hotel chains, banks, insurance companies and internet companies like Flipkart, Makemytrip and Snapdeal are using data to provide better products and service to their customers and thereby growing their revenues and profits.
A business running without data has to rely on luck and chance to survive, let alone succeed.