Are We Drowning in Data?

Every business owner in the world has felt the power of Big Data.

Some truly astounding technological advances over the previous few decades have revolutionized practically every aspect of operating a business. These changes have been implemented in hopes of improving productivity and growing profits. There is no question that increased data flow and retention, from customer profiles to product information to employee performance, has led to exponential growth for innumerable organizations. In fact, the top companies tend to be those that most effectively collect and utilize data. The benefits of the digital age are available for all to see and its growth shows no signs of stopping anytime soon. However, an important question is, when is data too much of a good thing?

Drowning in Data

In today’s marketplace, there is a seemingly endless list of software and toolkits. These boast that they can help you collect and understand data about customers, employees, products, and the market. In many cases, these claims are true. The digital age has put more information at your fingertips than in any other period of human history.

However, with this massive influx of collected information comes the danger of missing the forest for the trees.

If you are injudicious about the data you pay attention to, you are liable to end by keeping track of data points totally irrelevant to increasing profits.

A solid grasp of relevant data can be the difference between success and failure. However, it can be hard to decide what data is useful for profit growth and what is irrelevant or distracting. Identifying the necessary information from the useless fluff is the only path to sustained growth.

Using Data to Increase Profits

The key to successfully utilizing data in your business is focusing on hard, reliable data and cutting out the distracting fluff. Like any other tool, data will only help you if you focus on what increases your profits. Otherwise, you risk getting bogged down and finding the data overwhelming (and, therefore, useless). Even small changes in how your business utilizes data can make a massive difference in productivity and profit.

So, how can you most effectively collect and use data for profit growth?

Data can help improve the performance of individual employees and your team, overall. Used correctly, data can show you which areas of operation need improvement. It can also give insights into employee productivity and help you maximize it. The main benefit of company data is that it can help you course-correct and improve over time.
Data lets you base your decisions on evidence rather than a feeling or ‘instinct.’ Analytics software can be especially helpful here because it removes almost all the implicit bias associated with our own subjective analysis.
The hiring process can be totally streamlined using data analytics. Modern analytics programs make predictions of employee productivity and how a specific new hire’s skill set will fit into your business. This same data can later be used to make job training more effective for specific employees.

Avoiding Data Overload

So, how do you ensure your business is collecting and using the data it needs to remain competitive without overwhelming yourself?

First, focus on a single task or data point at a time. Resist the temptation to take on too many improvements at once. Instead, take the time to understand the data you collect and implement it in stages. Better yet, create a plan with your team for effectively parsing through the data step-by-step together or in small groups. This makes sure you understand the insights your data is giving you and can think through ways to effectively execute them.

Second, set specific goals for yourself and your business. These goals can be as simple as figuring out a new method to improve workplace safety or employee satisfaction. Examine the information you have collected on various areas of your business and see what the simplest improvement you could make would be. There is no need to begin improving your business with major changes. In many instances, a lot of small changes add up to major ones, and small improvements are often the key to increased profitability.

Collect data on how your workplace practices improve or suffer after each change you make. This is one of the main benefits of data-driven business growth: the ability to track your progress. However, make sure you do not let your data totally override suggestions from your employees and management team. Improvements need to be explained and integrated into the workplace in a positive way to make a difference. You cannot afford to ignore the human element of business by trying to digitize and automate every aspect of your employees’ workday. Paying heed to conclusions from data collection is vital to success, but so is examining those conclusions in light of how your employees see problems, practices, and improvements.

Finally, there is no need to obsess about every piece of data you collect. If a problem is solved and a new practice has been effective for some time, it is fine to pay less attention to that area and focus on others that need more work. While it is a good idea to check back on solved problems periodically, constant attention is often overkill and a distraction. Focusing on the wrong areas leads to decreased productivity and lowered profits.

When Data Is Too Much

How can data be a beneficial tool for your business without becoming a deluge of useless information?

Make sure you spend an appropriate amount of time understanding collected data (not too little, but not too much either). Analyzing data is not a substitute for taking action to solve problems.

Collecting data is an impressive tool that can revolutionize the way you do business.

If you use data right, you can significantly improve your company’s profits. The key is making sure that you use data where it is needed rather than letting it overwhelm you.