We’ve all had days where we wished we had psychic abilities.
“If only I’d have known there would be a traffic jam on Route 95, I would have taken another road.”
“If I’d known it would be raining this entire week in Florida, I’d have planned my vacation for some other time.”
We’ve had those moments in business, too. When we’re launching a new product, attempting to enter a new market, or otherwise making substantial changes to our strategy, it’s scary to put in the time and money up front, essentially investing in the unknown.
Fortunately, with data analytics, machine learning, and AI, we’re coming to a point where we no longer have to rely on guesswork, gut feelings, or psychic powers to make business decisions. By using data we have on our existing business, customers, and products or services, we can make informed decisions about where we want our business to go in the future, and what strategic moves will garner the best results.
There are some hurdles to making your data work for you, but when you figure out how to leverage the information you have at your fingertips, it can generate incredible results. Here, let’s take a look at some of the biggest challenges that come with putting data to work, and weigh that against the transformative power of the certainty that comes with good data analytics.
Bringing Disparate Data Together
One of the greatest impediments that businesses face is that even if they have data, it’s all over the place. Data about customer behavior is scattered across your CRM, email service provider, website analytics platform, and social media analytics tools.
There’s no real shortcut to bringing all this data together. The fact of the matter is that it takes time and effort. But the good news is, we’ve seen that work pay dividends. Take a look at this research team from the University of College London and Harvard Business School, who brought together lots of disparate data points to improve travelers’ experience at London’s Heathrow Airport.
About one third of all travelers to Heathrow are actually just passing through on connecting flights. The team of researchers did a deep dive into numerous sources of data on these passengers, including information from Heathrow, the airlines, passengers, and luggage tags. Because the data was coming from various places, it wasn’t easy to pull it all together, but once they did, they started to see hugely informative patterns emerge.
Using the data, they were able to create a model that predicted the number of people who would be passing through each immigration point in real time and could anticipate whether a given passenger would miss his or her flight. This allowed Heathrow to staff immigration checkpoints more efficiently and to proactively greet those passengers who missed their connections with the appropriate services.
Two years after the implementation of this statistical model, Heathrow has seen some incredible results. The mean absolute error of passenger flow predictions is down 20 percent, and airport stakeholders are thrilled. Now that they’ve seen the value of investing up front in bringing data together, they’re looking for more ways to harness their existing data to improve efficiency.
Overcoming the Reliance on Gut Feelings
Once you have the data up and running in a way that works for you, the next step is getting your team on board. A lot of people are skeptical about the power of data. Some feel that they’ve been in an industry for a long time, and their know-how and gut feelings are worth more than any spreadsheet or chart. However, feelings are not facts, not to mention that the world is constantly changing and what worked 10 years ago might not work today. When you can demonstrate in real time the effectiveness of relying on data, you can win over those stubborn hearts and minds.
Take some of these learnings from the world of baseball, as outlined in the Harvard Business Review. The players and teams who have been able to let go of antiquated notions about the sport have found that focusing on data instead helps individual players and teams significantly improve their games.
For example, some teams decided to collect and analyze data around the biomechanics involved in pitching. They realized that the tried-and-true method for throwing a fastball was inefficient and actually put players at greater risk for injury. When the pitchers changed the way they were throwing as a result of the data, their team won more games.
It’s as simple as that. When you’re able to get some quick wins from your data and prove its value out in the (proverbial or literal) field, it makes it easier to get your team to rally around the data.
Communicating Effectively About Data
You can only act with certainty on your data if you’re able to effectively communicate what the data says. As Ben Shields from MIT Sloan articulates in an interview with TechRepublic, collecting and analyzing the data is only one third of the battle.
The other two major pieces of the puzzle, beyond technical understanding, are strategic and managerial. Once you have the data in hand, you need a senior leadership team that’s able to use that data to create an effective path forward. And once they’ve settled on that path, you need to employ the managerial skills to communicate the plan effectively to your team.
Shields introduces sports into the conversation to illustrate how important it is to communicate about data in a way that’s easy for your team to understand. He says this works so well in sports because the end goal is simple: The team wants to win their game. Business leaders need to link up their data with a simple, actionable goal for their teams, too. When you’re able to do that, your team will be more willing to accept the data as their guide.
More and more business leaders are beginning to see the power of data. When it’s used effectively, it can eliminate the guesswork in the decision-making process. And when your team can confidently move forward with new innovations and initiatives, you reduce costs, increase buy in, and grow revenues.
About The Sterling Woods Group, LLC
The Sterling Woods Group’s mission is to help clients make sense of their data to predictably grow sales. We apply data science to help you optimize your sales funnel, improve your marketing ROI, launch new products successfully, and enter new markets profitably.
We use a hypothesis-driven, data-supported methodology to discover insights that no one else is paying attention to. Then, we help you assemble the right sales strategies, marketing plans, technologies, and resources to seize this opportunity.
About the Author
Rob Ristagno, founder and CEO of the Sterling Woods Group, previously served as a senior executive at several digital media and e-commerce businesses, including as COO of America’s Test Kitchen. Starting his career at McKinsey, his focus has always been on embracing digital technology and data science to spur strategic growth.
Rob is the author of A Member is Worth a Thousand Visitors and is a regular keynote speaker at conferences around the world. He has been featured on ABC, NBC, CBS, Fox, and Digiday.
He holds degrees from the Harvard Business School and Dartmouth College and has taught at both Harvard and Boston College.
Rob lives outside Boston, MA with his wife, Kate; daughter, Leni; and black lab, Royce.