Unfortunately, too often, that decision-making help remains only a potential because it is not converted into usable information. Why do so few companies take advantage of this opportunity?
In some cases, the difference between data and information is not fully understood. Many business owners express pride in the volume of data their systems produce, yet, when considering a major business decision, they have no usable information to help make a decision. Others understand data alone is not enough, but are reluctant to invest in ways to convert data to information.
I recently worked with a company to develop a strategic growth plan. Decisions made today will affect the business for many years and could mean the difference between long-term success and failure.
Although the company had sophisticated systems for gathering data, there was little usable information. Nothing could easily extrapolate the data and convert it to usable information. This led to another dilemma -- should management invest in ways to create information to help them make informed decisions regarding their future strategies or should they forge ahead with strategy decisions based on partial information and best guesses?
Investing in the creation of information costs money and delays development of the plan. But the information it will yield will increase the odds for developing successful strategies.
Good information is crucial to a positive outcome. Too often, owners and managers bemoan their inabilities to determine which areas of the company are profitable, the territories that yield the strongest sales and the markets where the company's presence is strongest. But with the right information, all of these questions and more can be accurately distilled.
No matter what my client decides,we are in an environment where we may not have the luxury of a do-over on decisions. We need to be as smart as possible. That requires a high level of business intelligence, and that comes only from having accurate, usable information. Joel Strom (email@example.com) is director of Joel Strom Associates, LLC, the growth management practice of C&P Advisors LLC. The firm works exclusively with closely held businesses and their ownership, helping them set and achieve growth objectives while maximizing their profitability and value. Reach him at (216) 831-2663.