Validation is a powerful emotion. It is extremely satisfying to see your business data align accurately with what you believed would eventuate. However, it can also be a waste of your data resources. Fight the temptation for constant positive reinforcement and angle your data assets to drive the future instead.
"Companies succeed in the big data era not simply because they have more or better data, but because they have leadership teams that set clear goals, define what success looks like, and ask the right questions", writes Andrew McAfee and Erik Brynjolfsson in their HBR article Big Data: The Management Revolution.
The typical gauge of success most organizations employ are KPIs (key performance indicators) that include conversion rates, cost per impression, and click-through rates. While each of these metrics is invaluable to an evaluation of strategy success, they only validate (or invalidate) existing business decisions.
While KPIs give you an understanding of whether your strategy is already working, KBQs (key business questions) help you define future success. They are the foundation on which you must base the decisions you make today.
The right KBQs for any business and any scenario can be ascertained using a relatively simple four-step process.
1. Clarity of purpose
Clarity of purpose is not quite the same as just "defining your purpose". Most managers understand that reaching a consensus across the entire organization can be difficult. This stems from extensive variation between the goals of different departments. A methodical investigation of the common elements of those diverse definitions of success must precede any definition of KBQs.2. Share and apply data
Approach data as usable facts and figures, not mystical information only decipherable by data scientists. This means that every stakeholder within the organization should have access to it and have their opinions heard. This stage is often where the focus on the future gets drowned out by opinions of whether the data justifies past decisions. Take care to avoid this time-intensive distraction.3. Craft your KBQs
The first step defines the purpose of the exercise; the second investigates the range of possible directions to explore; and this stage determines the questions that must be answered to align with the preceding process. Precision is key here - unambiguous language that zeroes in on critical aspects of your future plan is needed. For example, "What is our goal?" should give way to something along the lines of, "How do we use the data we have to reach our goal?"4. Determine KBQ priority
Step 3 should give you a raw list of KBQs that will form the basis of your future business plans. They will vary in complexity and ease of implementation. It is necessary to list them in order of priority to formulate an effective battle plan. There may even be a re-evaluation and removal of specific KBQs which require disproportionately large resources.
Good data and good data implementation will always be a critical element of business success. Make the best of your resources with a forward-looking mentality based in KBQs to consistently break new ground.
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