There was a time — not long past, actually — when executives operated with very little information. For example, three decades or so ago, publishers had no real-time data about how well books were selling. We (I was one of them) knew what we had shipped to wholesalers and shops, but not how quickly books were moving off the shelves. We had to phone wholesalers to ask how many they had left.
That information desert is now a data deluge. We who were parched are now drowning. But are we making better decisions?
The importance of good data
New studies from National Center for the Middle Market show that 24 percent of middle-market executives say that the data they have are of poor quality, are hard to get to, or are a hard-to-work-with jumble stored in several sources. (Scary stat: 27 percent of health care industry executives complain of poor-quality data.)
An even larger number say they lack staff with the skills to make sense of the data they have. The ability to obtain and analyze data is a powerful advantage.
Companies whose executives consider analytics to be extremely important are 25 percent more likely to have achieved double-digit growth last year than the average middle-market company. Three out of 10 of these companies grew 10 percent or more.
Thinking big and small
It’s a good thing to gather and analyze data. It’s a better thing to derive insights from that data and make smarter, better decisions.
Some of those insights might be tiny, pixel-sized things. McKinsey, the consulting firm, likes to make a case for the “granularity of growth,” the idea that little differences — we sell more pepperoni here, more mushroom there — can add up to a lot of opportunity.
Some insights might be the opposite, the kind of big-picture pattern recognition that can guide you to an emerging opportunity or alert you to a major market shift.
Strategic thinking is the key
But insights don’t always lead to action. The most striking finding from the new NCMM data came in response to the question, “Is your organization’s digital vision clear and comprehensive, widely understood and used to guide strategic decisions?”
- People who agreed with that statement lead companies whose average annual growth rate was 10.5 percent last year.
- Companies whose leaders were neutral or disagreed grew 6 percent.
In addition, the digitally driven companies added jobs more than twice as fast as the others, 7.3 percent versus 3.1 percent.
The pattern holds in all industries and regardless of company size; the road to growth is paved with ones and zeros. But the direction that road takes — the goals, plans, initiatives, investments and decisions — those are a function of strategic thinking.
Thomas A. Stewart is the executive director at National Center for the Middle Market, the leading source for knowledge, leadership and research on mid-sized companies, based at the Fisher College of Business at The Ohio State University. Thomas is an influential thought leader on global management issues and ideas — an internationally recognized editor and publisher, authority on intellectual capital and knowledge management, and a best-selling author.