Seven things to remember when using data

Over the last 3 weeks, we’ve discussed some key concepts and mistakes that leaders make when dealing with data.

Part 1 – why we measure
Part 2 – the two mistakes with averages
Part 3 – when an improvement really isn’t an improvement

To wrap up our 4 part series, I’ve listed seven basic but key concepts for you to keep in mind.

Data is more than just numbers

Data is information used for reasoning and analysis. If all you are looking for is “up” or “down” with your numbers, you’re missing out on real analysis that might make or break your business.

If it’s important to you and your business – it needs to be measured

This is more than just your high level metrics. Every critical second (and third) level process that affects your most important metrics need to be measured. If you don’t know what is happening on those levels, with solid data and analysis, then you are just guessing and hoping for the best.

Everything can be measured

It’s a very popular misconception that many things in the business world can’t be measured. But they can. It might not be easy or pain-free. But in some way, everything can be measured. I’ll say it again: If it’s important to you and your business – it needs to be measured.

Set up a “war room” where your key metrics, and their key drivers, are being looked at and discussed on a regular basis.

Every graph should tell a story

Sometimes the story might be “nothing has changed”, but that’s still a very important story to tell. Know what change looks like, so you’ll know when you see it. Know what graph or chart you are using and how to react when next month looks different.

A bar chart is not the right tool for showing data over time

This one is going to sting some people. I don’t know why people love using bar charts to show improvement over time, but they do.

If you are simply comparing levels from one year to the next, then go for it.

Comparing static sales levels of 3 different products? Sure.

But if you are trying to tell the story that something is getting better or worse over time, using a bar graph is not nearly as effective as a line graph (control chart). Plus, the analysis you can get from it is easier and more dynamic as well.

Know your actions

Anytime you look at data, you should be analyzing for meaningful change, and know what to do when that change happens. If you are looking at the same metric every day, are you evaluating and reacting because the daily change is vital to your business? Or are you micromanaging your data?

This is common in businesses that don’t understand data well. Having a daily e-mail that goes out to your leadership team when there is no real reaction to daily fluctuations is a waste of everyone’s time.

Don’t spend any part of your day looking at things daily, like sales levels, customer interactions, census levels, etc., unless you have specific actions planned if they change in specific ways.

Instead, keep measuring on a daily level, but only look at it and evaluate on a weekly, monthly, or quarterly level when the analysis is more meaningful and you will be more likely to actually see real trends and take action to longer term changes.

Invest in a data analyst

Having someone who is focused on data, who knows your business, shares your goals, and is motivated to improve with your business is the key to maximum growth.

If your business model supports it, hire a data analyst and embed them in key areas of your business. Let their only job be to collect, analyze, and report data to your leadership on the key areas of the business. If you are doing it right, this should be a full time job.

If you don’t have anyone internally, get a part time consultant. You don’t need to be a statistician to know your data, but most business leaders don’t have the time or experience to dig deep in order to identify the variation that will help them make good decisions.

Your business is too important to you. Don’t guess at what your data is telling you, or stop at the high level when there is so much more you can learn.

Good data analysis should be guiding you every step of your journey.

For help with these issues and to get other tips, visit www.processpro.net. While you are there, check out and subscribe to our blog for FREE weekly business tips.

This is the last of a 4 part blog series on data, its problems, and how to use it to get more value out of your business. It will be followed up with our very first podcast – Process Pitches – where we will be inviting Six Sigma/Lean/data experts and business leaders to share some of their stories from the business world about the struggles leaders have understanding data to its fullest.

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