Follow the Data

Early in my career I noticed how often smart, logical colleagues would make recommendations biased in their favor.  Too often, the issue was that the criteria for making a decision would be determined after some preliminary "peeks" at the recommendation that it would result in.  It was then, that I resolved to develop analytical models that were opinion free - that I could get colleagues or team members to agree on before running data through it to see the result.  Once the model was agreed, then the inputs would just drive an output or recommendation.  With such an objective, fact-based approach to decision -making, I steadily developed a reputation in my company for being an analytical, fact-based leader who drove the best decision based on the data available. 

While preferring to be fact or model-based in decision making, it is another truth that many tactical decisions need to be made where a model isn't available or where the available data is limited.  Here the decision-making principle that "Sometimes the most important consideration regarding a decision is the value of simply making one" applies.  Progress, inertia, forward momentum, has it's own value - often forfeited or compromised when too much time is spent waiting for 100% of the data to roll in, or too much angst regarding risk paralyzes the decision.  Being decisive  is a powerful leadership trait which drives business results.  This complements knowing when you have enough data to make a good decision.  After all, how soon you realize benefits can only be measured when a decision is actually made and implemented. 

Like many experienced leaders who drive transformational change and business performance, I have developed insights about levels of performance, size of opportunity and solutions which best deliver the opportunity. Yet rely more on facts than on insight and rely not at all on anecdotes and opinions.  It is tempting to be persuaded by a charismatic individual who tells you why her or his function is performing at high levels.  We've all met them and have been drawn in by their story.  But it's the real deal only when they can show you why they are high-performing.  Even when there are data and facts being used, fact-based assessments of performance are only meaningful when data is framed relative to other facts. 

To clarify,   absolute performance levels are meaningless on a standalone basis.  E.g. unit cost is $1.32 per transaction.  Accuracy is 97.8%.  Systems availability is 99.2%.  These results become meangingful only when performance is viewed over time and when performance is viewed relative to your competition.  When only internal data is available, the performance trend is meangingful.  A positive trend signals continuous improvement.  When you add external benchmarks you can then gauge your business performance relative to the top performing companies in the industry you are in - and set new targets based on that performance and your resolve to reach a targeted performance level and rank.  Put another way, it is important to know that your revenue is growing 10% in a year but you've lost 5points of market share because the market is expanding at an even greater rate and you are actually falling behind.

Some "bad news means good news" thinking about performance and opportunities.  As a starting point, think about opportunities based on the presence or absence of things.  Look at business functions and see if processes are mapped and current.  Determine if there were stable and relevant metrics in place.   Feel good if there were at least 3-5 years of performance history to work with.  Then sit down with the function leader and learn how well those metrics align with the strategic objectives or priorities - in other words, are they measuring work that is directly tied to the business outcomes the function is accountable for.  Finally, how informed is the business team regarding their performance relative to the competition?

At a macro level,  the very presence or absence of these things would serve to inform an initial view of where this function or process or company sits on a performance maturity continuum.  Is the business activity "managed" or "unmanaged"?  Tying this back to my "bad news is good news" comment above, the functions or companies which were the least mature always had the greatest opportunity on a percentage basis.  Functions don't accidentally perform at high levels.  Perform is optimized when high performance is designed into the process and when the work is managed very well.  When work is managed well, opportunities might very well exist but would more often be linked to structural advantages of alternative solutions or a specific objective to achieve different performance traits than in the past due to changed business objectives.

Which is why I've selected the slogan.....

"Enabling Companies to Reach Their Performance Potential"