Why Business Leaders Need to Take Data Seriously in 2021
As the amount of data we deal with on a daily basis continues to grow exponentially, it is increasingly important that we use it the right way.
For business leaders, decision making is critical, often involving thousands of people or millions of dollars. The key to making choices you can be proud of — even in times of stress or crisis — is data. This has already been true for years, with data management and analysis becoming central to general operations, improvement/growth and identifying variables involved in building your strategy for the future. But, it’s going to be especially important for you to take information seriously in 2021.
Related: Why Your Startup Needs Data Science
Identification of metrics
Some metrics (e.g., customer churn) are pretty foundational. But, exceptional companies identify specific metrics that set them apart from competitors, align with specific goal sets or reveal what’s happening in their industry and the larger economy. Once you have the data from these types of metrics, you can test things that might seem counterintuitive and work much more objectively. This contributes to agile shifts that help you respond to hurdles and keep you relevant for the long haul in the expanding and ever-changing global economy.
Psychologically, everybody enjoys feeling heard, wanted and included. Applying this to business and your customers, you cannot focus on yourself or make the pursuit of profits all-important. Instead, you have to focus on listening to the buyers, figuring out what they really prefer or need and giving them a sense of insider connection. Profits come as a natural byproduct of this process and the resulting relationship.
As customers gain more and more options about where to place their money, becoming more customer-centric through data should be a top priority. With surveys, demographic information, online reviews and other touchpoints, you can figure out how to serve your buyers in incredibly specific ways and predict what they will want. This will also make it easier to hone your marketing messages for greater effectiveness across different groups.
As a good example, consider Netflix, who looks at customer data to see which kinds of shows and movies are most popular. Then, it finds and buys similar scripts, assuming that if its members liked the original style, then they’ll probably like new, similar ones, too. This simple, data-based method has helped Netflix increase its business value by more than $50 billion this year as people navigate entertainment through the COVID-19 pandemic.
Good companies are always responding to their customers, whether by handling returns, answering product questions, adding features based on feedback, or something else. But the best companies are proactive rather than just reactive. If you gather the right data and analyze it properly, you can actually determine what your buyers are going to want or need (i.e., anticipate trends). The better you do this, the better leg up you can get on your competitors -- and the easier it will be to get out ahead in innovation and design to capture early market share.
Jeff Bezos stands as a great example for this point. The leader of Amazon believes that identifying customer needs lets you work toward something that doesn’t even exist right now — enabling you to actually invent the future. This becomes all the more important when you consider your business values and ethics. What you do with customer data influences building not only a business, but also a specific vision of society and the larger world.
Resilience, productivity and joy
Most organizations want to operate lean and kick out any unnecessary fluff. They want high yield at low cost, and they want workers to be happy.
Specific metrics can reveal areas of waste or points to improve, which helps you figure out how best to pivot or approach your resources. They can also reveal whether candidates will be a good fit or whether employees really are satisfied.
Successful companies thus are those that prioritize data as a way to define and create positive company cultures that produce resiliency, productivity, and joy. As leaders try to navigate through the Covid-19 pandemic and stay operational in the face of an increasing number of world issues, data will become even more precious for establishing inspiring business atmospheres and impressions of security.
Our ability to gather and interpret data is getting better every day. And because 2021 will present new and increased challenges, your best bet for success is to utilize information with every practical tool you have. Decide what’s going to be most relevant, analyze with transparency, and then move forward with confidence.
Entrepreneur Leadership Network Contributor