Why companies need to look beyond the numbers

Businesses thrive on achieving and exceeding numbers. I’d be lying if my company, Red Door Interactive, didn’t pay close attention to analytics because after all, we would be out of business if we didn’t deliver results. While spreadsheets can be an essential tool for any organization, focusing solely on the raw data can restrict a company from reaching its full potential. Having a clear strategy for not only measuring results, but then understanding what it all means and knowing what to do with information is another part of the equation that is often times overlooked.

As for me, I don’t stop as simply getting the data, but asking myself and my management team three questions when they’re presented:

What were the goals?

Achievements are based on more than just figures. For example, a company may be proud of the number of Web site visits during a specific time period, but was the goal to attract new visitors or was it to increase sales? Most likely the goal was to drive more revenues and while raising the number of online visitors is great, the ultimate objective was overlooked if that’s all that resulted from an initiative.

Does anything need to be changed?
Data is a great indicator for what modifications need to be made and can help companies improve in different areas. Take the sales example again. If the goal was to increase online revenue, determining at what point in the process customers leave the site and why may highlight a barrier to their shopping experience that, if fixed, can convert more visitors more quickly. The great thing about numbers is that they can serve as red flags by guiding companies to focus their attention in a variety of areas.

Did I learn anything new?
By examining data, new trends can also be revealed. Understanding what numbers mean can unveil new ideas and strategies to build on and execute. I find numbers can not only tell what happened, but quite possibly predict future trends and opportunities. It’s this kind of information that may prove the most valuable to an organization when given the right attention and perspective.

Almost every business in any industry deals with data and spreadsheets. It’s important to realize that the information alone is just a compilation of hard numbers. The real goal instead is to understand what it all means and benefit from that information. As a general rule, while I enjoy seeing the numbers, I try not to get too bogged down with the analytics, but instead, set up a strategy to determine what data takes priority and what to do with it once it’s known. Doing so has served us well and one of the reasons why we grew 40 percent in 2009 despite the recession.

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3 Comments

  • Lawrence Serven

    As a Manager of Financial Planning & Analysis at Pepsi, we use to say it was all about "getting the story behind the numbers". In other words it meant little that a department wanted a 40% increase in their budget, what mattered was why they wanted it.

  • Dan Rockwell

    Reid,

    Thanks for your insights and encouragement to look beyond the numbers. Your comments about goals are spot on. I've begun living a vision driven life and find vision enables me to effectively evaluate raw data. Vision driven living is changing me. It's making me more effective and more efficient.

    I wrote a short blog "Drifters" that touches on the power of vision.
    http://leadershipfreak.wordpre...

    Thanks again for your great post.

    Leadership Freak
    Dan Rockwell