I am a huge soccer fan and stats are becoming a bigger and bigger part of the game. When I started watching as a young boy, the only stats we had were the final scores. These days stats abound. During the game we get shots and possession for each team. Afterwards we can get all kinds of information about the team and individual players. For examples passes made, distance run by each player, etc.
Are these additional stats useful?
With all this information available, there are more and more debates about it. Was the result fair? Is the team playing well? Is it getting better? Where can it improve? I am not sure we are much smarter but we have a lot more things to discuss. Besides not being helpful, some information is misleading. Shots taken is an example. At a recent game, the team I support had 3-4 times more shots taken than the opposition. While that sounds good, we lost the game.
Shots taken is less important than shots on goal. In the game we lost, the opposition had more shots on goal. More shots on goal equals more real scoring chances. As more information is available, we need to be more discerning about what we pay attention to. Is the information serving us well and helping us achieve a better result?
The same is true in business
This is very true in business. Information availability is exploding and it’s often not useful. Here are some things to consider when viewing business information:
- Focus on measuring outcomes not activity. Activity is useful, but it is more important to know how close you are to your outcome.
- Track rate of change. Your data may be showing an improvement. This is great but is the rate of improvement enough to achieve your goal on time?
- Focus on leading indicators. We have more data which is lagging describing what happened. It is much better to focus on leading indicators predicting what will happen. Looking at billings information is very appealing, but bookings are more important.
- Don’t ignore qualitative data. Quantitative data is the most reliable because it is objective. That said, sometimes we only have qualitative data and we are worse off for ignoring it. An example is how we feel about something. This is key in customer sentiment studies.
What information are you paying attention to and how well is it serving you? What are you missing and how can you get it?