The businesses that win in the future are those that apply what I call the science of winning. Science is all about evidence-based insights and using the best available data to draw new conclusions. Businesses, big or small, that apply the same principles will outperform their competition.
At the moment, 90% of business decisions are not based on good data or the principles of science. Instead, they are mostly based on a mix of gut-feel, hearsay, anecdotes and poor data. This also means that most business decisions are not as good as they could be.
There is no excuse not to make solid decisions supported by good dataToday, there is no excuse not to make solid decisions supported by good data. If there is one certainty at the moment, it is the fact that we already have more data at our fingertips than we need and the rate at with we are generating new data is scary. If we take all the data in the world that we created from the beginning of civilisation until 2008, the same amount of data will be generated every 10 minutes by the end of this year!
The data explosion is fuelled by the digitalisation of our world, where we consume music digitally (which leaves a data trace), where we search for things online (which leaves a data trail), where we have conversations over email or on Facebook and Twitter (which is all recorded and stored). In addition to this, every minute we are uploading 200,000 new photos to Facebook and 100 hours of video to YouTube. Finally, sensors generate a plethora of data: Our smart phones track our position, our wearable devices like UpBand or FitBit as well as smart watches (which are just starting to enter the market) track our calorie consumption, activity levels, sleep quality, and soon so much more.
For many of these technologies it is early days, their ability to capture and transmit data will only improve and add to an unstoppable data tsunami. So, what does this now mean for business? Aren’t our corporations clogged up already with data, information, KPIs, management reports? The answer is yes, but 90% of it is never used to inform decision-making. The point I want to make here is that we have to stop collecting and reporting the unnecessary and old-fashioned data and embrace the new world of ‘Big Data’ (the term we use to describe our ability to collect and analyse the masses of data that is coming at us).
I can hear you ask your next question: With our existing IT budget and infrastructure we are struggling to manage what we already have, how could we possibly leverage ‘Big Data’? It is easier and cheaper than you think. There is more data out there than you might think. For example, many government agencies now make their data available for free. Many companies do the same – just think of Google analytics or Google Trends. They collect the data and crunch it for you. For more specific needs you can now rent software and hardware, so called SaaS – Software as a Service, and cloud computing solutions. All this makes it very easy for small and medium sized companies to do the kind of stuff only the big boys could do a few years back.
We need the ‘right’ data to support your most critical business questionsBut before you start here is a big warning: Remember that more data does not guarantee better decisions. We need the ‘right’ data to support your most critical business questions, which brings us back to the science part.
Good science is about identifying the questions you want to answer and then collecting the right data to answer them. The same should apply in business. Start with your strategic objectives and priorities and identify the key questions you need to answer. Then think about the data you might need to answer the question, but think ‘Big Data’, not just the small stuff you have collected for years.
Let’s look at some practical examples of how companies apply the new science of winning. For example, retailers can combine data collected from loyalty cards and internal transactional systems with social media data and Internet browser logs to detect and leverage changing buying patterns and trends. Applying these tools makes is easy for retailers to predict, for instance, that a woman is pregnant, simply based on the changing buying patterns (vitamins, pregnancy tests, baby magazines, baby cloths, etc.) This allows retailers to target pregnant women at the right time (e.g. second and third trimester) with promotions for baby related goods.
Big data is currently transforming the world of marketing. Let’s look at what some of the big boys are doing already: Wal-Mart is able to take data from your past buying patterns, their internal stock information, your mobile phone location data, social media as well as external weather information and analyze all of this in seconds so it can send you a voucher for a BBQ cleaner to your smart phone – but only if you own a barbeque, the weather is nice and you currently are within a 3 miles radius of a Wal-Mart store that has the BBQ cleaner in stock.
Branding is another area that is being transformed using Big Data Analytics. Companies realize the power of social media to boost and damage brands. We have all seen how stories like a single tweet from a disgruntled airline passenger can go viral in minutes. The brand Gatorade, for example, has created a social media analytics room, from where it monitors, analyses and reacts to social media stories 24hours a day. And again, a tool to detect what people are saying about your brand, including a sentiment analysis of whether they are saying positive or negative things, is available for free!
There are no excuses anymore and not embracing the new science of winning will simply mean that you’ll be left behind.