by Charles Daniels
The measurement of my responsibility as a leader can be summed up in one word: results. Therefore, everything I do should relate, in some way, to ensuring that Wepco Plastics achieves the best results possible. I believe that paramount to this is making good decisions, and then monitoring and evaluating the effectiveness of those decisions. This is a job I couldn’t do properly without sound information.
In my experience, I have noticed that many companies undervalue or under-invest in a potentially tremendous asset, being data. When collected, analyzed, communicated and used effectively, data management can become a real competitive advantage. Full potential can only be reached when the importance of data is understood and promoted throughout the organization on every level. I am astounded when I talk to people in successful businesses that can’t answer basic questions about financials, operational statistics or performance as it relates to goals.
Data can mean many things and take on different forms. Financial Data, such as revenue or items sold, and Operational Data, such as scrap percentage or machine utilization, are some examples. Every part of a business can generate revenue, and it is up to the organization to make collecting and tracking that data a priority.
Successful data collection and analysis are dependent on multiple factors; the first is consistency. Data must be collected at regular intervals, by the same method, expressed in the same format. The definitions of what is to be collected and any formulas or language related to the data must be uniform throughout the organization. The output of the analysis needs to be easy to understand and easy to access. Finally, and most importantly, the data and analysis must be used!
Once data is compiled, there are several ways it can be examined. The simplest way is comparison. Information collected can be compared to industry averages, historical totals or goal and budget targets. These methods can give an excellent snapshot of how the business is doing and open a window to predict how the business will do in the future. Researching trends, correlation and causation, and what they mean to your operation will help to make informed, reliable decisions.
I spent perhaps an inordinate amount of time reviewing statistics, output information, financial figures, etc. First in isolation, then comparatively to history and budgets, and then paired with other sets of data. I don’t always know what I am looking for, but I always know when I find it. This approach helps me to avoid biases and eliminates the temptation to make the data show what I want it to. These two situations, along with incorrect or “bad” data, are an evil triumvirate that makes meaningful analysis impossible.
We live in the information age. Companies that remain blind to internal and external information, when we all have the ability to access it, are doing themselves a great disservice. The simplest way to start is to look at the company’s goals and determine what metrics drive those goals. Begin tracking data related to these metrics and monitor them regularly. Use this systematic approach to look for issues and opportunities to improve the business. Businesses that do this well will continue to be more innovative, productive and profitable than companies that do not invest resources in data.