The Age of Data — The New Digital Gold?

Jelly – Digital Agency

Do you know what Google and Facebook, TikTok and the supermarket chain where you do your shopping, and your company and the companies of the future all have in common? They're all data networks — data companies.

With each passing day this becomes more accurate, and it's important that we're ready to adapt. Let's look at why.

Data is now so valuable that companies, from start-ups to large corporations, will climb 100 mountains, leaving money, time and energy behind them along the way, just to acquire, process and analyse it. These herculean efforts come down to one fact: few things produce so much in return.

Data is far too valuable not to have. It's a kind of marginal superpower: the power to know what the right next step is. Let's rewind a little to understand in more detail how that works.

Information has always been valuable.

It's valuable to the point that we organise society around it, dividing ourselves up by activity so that each person produces where they hold the greatest capital of knowledge or practice.

We are part of various organisations governed by the principle of specialisation and comparative advantage. Society is the largest of them.

Why is information universally and timelessly valuable?

Because it guides our decisions.

But what are the different ways a business can go about making decisions?

For over a millennium, at least — as far back as we have data that allows us to count — human beings have looked at information through one definitive separation: facts and non-facts.

Notice how I've just given you a piece of information presented as a fact, based simply on the existence of material evidence — data. The way we separate a fact from a feeling, a perception or an opinion is the existence of data that classifies it as such.

Today, information is no more valuable than it was during the second industrial revolution. It's simply that access to it has been democratised by the evolution of technology, penalising those who refrain from obtaining it. In fact, in times gone by, whoever held the information had, by contrast, a greater advantage than whoever holds it today. Those who didn't hold it, however, were less penalised.

Today, if we don't have complete information, we have to be aware of the strong likelihood that the other players — competitors and even customers — do.

Without data, there's always a problem

Every decision exists to solve a problem. We make decisions in an attempt to close the distance between us and our ambitions. That's exactly what problems are: the things stopping us from already being where we want to be. We don't necessarily have to be averting a catastrophe for something to count as a problem. Producing 9/10 of a business's productive potential is a problem.

The funniest part? Without objective data, there's always a problem. Let's look at why.

Without measurement, without data, without systematic analytical processes, it's impossible to know whether there's one problem or twenty. Without metrics, the perception is that there are never any problems. And that is the biggest problem of all. There are only two ways to guarantee we don't solve a problem: never knowing the problem exists, or knowing and leaving it to chance. A necessary condition for survival

Having systematic processes for internal and external analysis is a necessary condition for survival. Why? Because the neighbours will have them. And they'll make zero miscalculations, let alone mistakes when it comes to deciding. That's what we should be counting on.

Even if that's unlikely to be the case, because mistakes happen at every level, we'd do well to face up to the possibility.

Let's take a detour.

There's sometimes an idea that every conclusion has to come from objective data.

Measure, analyse, decide.

If that were the case, perhaps the right thing to do would be to hand the management of our businesses over to AI tools! I don't think that would be a good idea (at least not yet!).

Consider the following example

Imagine this question put to a business owner: “If a new competitor entered your market and you knew it held twice as much information as your company (adding each employee's knowledge to the information held by management that has a direct effect on its decisions), how likely is it that this company would be a threat to your operation?”

If the answer is something like “There'd be a good chance it would be a problem”, given that we know nothing else about this new competitor, then we can conclude that information carries more than 50% of the weight in that context. How much money, time and energy is it worth devoting to something that could account for more than 50% of the results?

It's interesting to think that, when hiring an agency, consultant or specialist in a given field, it would be unthinkable to watch that professional begin their work with anything other than a general audit, or at the very least an initial round of information gathering.

The same astonishment would be felt by a patient who, having just walked through the surgery door with a new and recent problem, is handed a sheet full of prescriptions.

Without a diagnosis, the only thing that can solve any problem is luck.

Let's leave hope for other areas of life. Not knowing your business's internal metrics is on a par with not knowing your own height and weight.

Fun fact: did you know that simply weighing yourself regularly significantly increases the likelihood of losing weight? But more importantly, did you know that the chance of someone who wants to lose weight actually achieving it is practically zero if they don't weigh themselves regularly? The power of data!

Metrics are the backbone of a business.

However clearly we know where we want to get to, we can only map out the route if we know precisely where we are. Of course, if we want to win the race, it also matters where everyone else is and what state the world is in!

Here's a joke a friend of mine likes to tell: “Doing business without metrics is like crossing a greenhouse full of cacti blindfolded. Somebody's going to get pricked.”

Data is to a business what the five senses are to a human being. They're not enough to thrive, but they're non-negotiable. Without them, it's more efficient to pass the baton on.

So if you don't know ALL of your business's metrics, nothing is more important than finding out.

Let me leave you with one important piece of information: marketing and sales, which work through a mix of creativity and data, carry more influence over the success of any business, large or small, with each passing day — and their level of effectiveness has for decades been the best predictor of success for any venture!

Happy measuring!