Brent Dykes published a Forbes article yesterday that I had the pleasure of contributing to. In this article Brent discusses why data and analytics takes on increased importance during challenging times like what we are experiencing right now.
He also breaks down what it means to effectively leverage data and analytics to overcome adversity and evolve your strategy.
While there are numerous steps businesses can take to set themselves up for future success, some strategic, data, and analytic opportunities stick out. Below is the full writeup I provided for the article.
* Now is the perfect opportunity to lead your organization into the next phase of its evolution. We will see a major revolution from the technical and academic focus of data analytics into projects that deliver exceptionally clear business value.
* Within every challenge is opportunity. Look at this as an opportunity to evolve your business.
* Strongly consider the role analytics can play in taking your business to that next tier. Analytics can be an exceptionally powerful strategic force multiplier.
* Start with small analytics projects to highlight the opportunities with the greatest potential and/or least risk.
How, where, and why should companies “double down” on data?
The answers to many of your most pressing business, customer, and market questions are likely already within your 4 walls, hidden within your data. As a business leader, you own it to yourself and your organization to make sure you are fully leveraging the potential in that data to answer strategic questions and create your strategic roadmap.
Looking for where to start? I recommend a robust sales and pricing analytics platform as these tend to be extremely versatile projects with very clear traceability to P&L benefit. You can often get a rapid return on your initial investment. These are low risk projects that tend to have significant upside potential if management is willing to commit to the analytical cause.
By establishing a solid analytical base in these areas, you can better understand your top revenue and profit drivers. Additionally, these types of projects tend to have long tentacles that positively impact various other projects throughout the business, such as operations and supply chain.
If there was ever a perfect time to hop into the data and analytics game, now is it.
What are you doing to adjust or pivot to this new environment?
We are focusing on helping the industries we serve make sense of everything using impartial data and objective analysis. Business are looking for truthful information on what is happening. This can be difficult to find. Our goal is to give them the insights they need to make decisions with confidence.
Additionally, we are testing out new ideas every week. Some will work and some will not, but it is an outstanding time to test new things out and see what works. You might be surprised what you find. We certainly have been.
As an example, we are constantly conversing with our customers to understand what they are thinking, what questions they have, and how we can help them out during these tough times.
We want to be a reliable resource they can trust to give them deep, powerful, credible, and unbiased insights on their industry and the broader economy.
As a result of these conversations, we have actually created an entirely new suite of financial benchmarking and economic insight products to help businesses track the recovery of their industry.
Ironically, current events have actually increased demand for our existing economic and market insight products. This was completely unexpected, but upon gathering customer feedback, it makes complete sense.
What are your smartest/best clients doing right now?
The smart leaders are staying calm and leveraging this opportunity to recalibrate various components of their business. They are also taking on projects that fall into the “Strategic, but not urgent” bucket.
These are the projects that have been sitting in the “to do” queue for a while, but might not have been addressed because of other priorities.
As an example, one of our biggest clients just kicked off a robust sales & pricing analytics project with the goal of understanding the “total cost to serve” of their customer base. The plan is to segment the business into profit winners and losers.
There are a lot of losers, which completely surprised the management team. Drivers for the losers were poor price management and lax freight recovery policies. They weren’t even aware they had these issues. The amazing part is these issues tend to transcend company sizes and industries.
The losers will be addressed by either 1) delivering price increases to get them to a point of profitability or 2) shedding the business to open capacity. These actions will not be taken right now, but they are taking the needed steps today to be ready to make those strategic moves tomorrow.
If we can get these negative margin customers to break even profit levels, it would increase OP% from 11% to 14% within a year. Those are business changing OP improvements.
The smart companies are continuing to develop and execute on their strategic plans which will enable them to come out of this situation in a stronger market position.
What mistakes do feel companies are currently making?
This situation is the business equivalent of a heart attack. It is important that we learn our lessons and change the way we operate. It is easy to fall into a routine. Now is the time to make the needed changes to live a long, prosperous business life.
* Letting Fear Control Your Strategic Agenda: Companies may be paralyzed with fear, causing them to make strategic decisions based on emotion. This is a natural reaction, but it may be a strategic mistake.
As mentioned before, the business game has changed. What worked before will not work in the future. You need to evolve, and the evolution needs to start now. That is not optional.
To think that you can just “hold the line” and turn things back on when the “new normal” arrives is a fallacy. This sounds harsh, but business leaders need to realize it is the truth.
* Not Looking For Help From Your Current Roster: Executives may not be leveraging some of the best resources they have available to help drive improvements in their business. Management needs to identify their game changers.
Look thru your roster and look for the people capable of helping drive the needed change in your organization. These people likely will not be in your executive ranks. Look at the high potential visionaries at the mid management level.
These are individuals high enough to have clarity on the strategic vision of the company, but are still close enough to the day to day activities of the business to be able to quickly identify game changing opportunities. Also, be sure to give them a voice and seriously consider their recommendations.
* What Worked Before Will Not Work In The Future: Many business leaders have been immensely successful thru their careers without analytics, so they naturally question the need for it. However, what worked in the past will not work going forward.
The game has changed, and business leaders need to fully vet all resources at their disposal to run better, more profitable businesses. Analytics should be at the top of that list as it helps identify the largest improvement opportunities and can deliver huge financial results with minimal investment. It is a great time to leverage outside expertise to get these types of initiatives off the ground and quickly show value.
Read the full article here.