Jelly – Digital Agency
Do you know what Google, Facebook, TikTok, and the supermarket chain where you do your shopping have in common with your business and the companies of the future? They are all data networks, data-driven companies.
As each day passes, this reality becomes more evident, and it’s crucial that we are prepared for this adaptation. Here’s why.
Data is so valuable today that companies, from start-ups to large corporations, climb 100 mountains, leaving money, time, and energy behind, just to acquire, process, and analyze it. These Herculean efforts are due to the following fact: few things produce as much value.
Data is too valuable to overlook. It’s like a marginal superpower: the power to know what the next right step is. Let’s rewind to understand in more detail how this happens.
Information has always been valuable.
It’s so valuable that we have structured society around it, organizing ourselves into activities so that each person produces where they hold the most knowledge or practical expertise.
We are part of various organizations governed by the principle of specialization and comparative advantages. Society is the largest of them all.
Why is information universally and timelessly valuable?
Because it guides our decisions.
But after all, what are the different ways of making decisions that a business can adopt?
For at least a millennium – since we’ve had data that we can account for – human beings have viewed information through a definitive separation: facts and non-facts.
Notice how I just gave you information identified as a fact, based solely on the existence of material evidence, data. The way we separate a fact from a feeling, perception, or opinion is through the presence of data that classifies it as such.
Today, information is no more valuable than it was during the 2nd industrial revolution. It’s simply more accessible due to technological advances, penalizing those who abstain from acquiring it. In the past, those who held the information had a superior advantage over those who didn’t. However, those who lacked it weren’t as penalized.
Today, if you don’t possess complete information, be aware of the high likelihood that other agents – competitors and even customers – do.
Without data, there is always a problem
Every decision aims to solve a problem. We make decisions in an attempt to close the gap between where we are and where we want to be. Problems are precisely that: the obstacles preventing us from already being where we want to be. We don’t have to be averting a catastrophe to label something as a problem. Producing 9/10 of a business’s potential output is a problem.
The most interesting part? Without objective data, there’s always a problem. Here’s why:
Without measurement, data, and analytical processes, it’s impossible to know whether there is one problem or twenty. Without metrics, there’s the perception that there are never any problems. And this is the biggest problem. There are only two ways to ensure we don’t solve a problem: never knowing it exists, or knowing and leaving it to chance.
Necessary condition to survive
Having systematic internal and external analysis processes is a necessity for survival. Why? Because your competitors will have them. And they’ll make zero miscalculations, and far fewer mistakes when making decisions. We must count on that.
Although this rarely happens, as errors are common at all levels, it’s important to acknowledge this possibility.
Let’s take a detour.
Sometimes, there’s the idea that all conclusions must come from objective data.
Measure, analyze, decide.
If that were the case, perhaps it would be best to hand over business management to AI tools! But I don’t think that would be a great idea (at least for now)!
Let’s consider the following example.
Imagine this question posed to a business owner: “If a new competitor entered your market and you knew they held twice the amount of information your company has (combining the knowledge of each employee with the information held by management that directly affects their decisions), how likely is it that this new company would be a threat to your business?”.
If the answer is something like, “There’s a good chance it would be a problem,” and we know nothing else about this new competitor, we can conclude that information weighs more than 50% in this context. How much money, time, and energy would it be worth dedicating to something that could contribute more than 50% of the results?
It’s interesting to think that when hiring an agency, consultant, or expert in a specific field, it would be unthinkable to see the professional start their work with anything other than a general audit or at least an initial information gathering.
The same surprise would occur if a patient walked into a doctor’s office with a new, recent issue and was immediately handed a sheet of prescriptions.
Without a diagnosis, the only thing that can solve any problem is luck.
Let’s leave hope for other domains. Not knowing your business’s internal metrics is like not knowing your height or weight.
Curiosity: Did you know that simply weighing yourself regularly significantly increases the likelihood of losing weight? But more importantly, did you know that the likelihood of someone wanting to lose weight achieving that goal is virtually zero if they don’t weigh themselves regularly?
The power of data!
Metrics are the backbone of business.
No matter how much we know where we want to go, we can only chart the path if we know exactly where we are.
Of course, if we want to win the race, it also matters to know where everyone else is and how the world is doing!
Here’s a joke my friend likes to say:
“Running a business without metrics is like crossing a cactus greenhouse blindfolded. Someone’s going to get pricked.”
Data is to business what the five senses are to humans. They’re not enough to thrive, but they’re indispensable. Without them, it’s more efficient to pass the baton.
So, if you don’t know ALL the metrics of your business, nothing is more important than finding out.
I’d like to leave you with an important piece of data:
Marketing and sales, which are a mix of creativity and data, increasingly influence the success of any business, big or small, and their effectiveness has long been the best predictor of success in any venture!
Happy measuring!
