Do you make business decisions based on facts and objective evidence, or on theory, past history and assumptions? Do you have objective data from which to make decisions? Do you use established and consistent measurements and market data as the basis for decisions? Are you using Fact Based Decision-Making?
These are tough questions, to be sure. Especially so for business owners and managers with a lot of experience in their markets, and with their customers, products and services. Experienced business-people can have the quite human trait of relying on and favoring their own experiences to make decisions. Although business experience has real value, it can also lead to blind spots about a business’s situation and create a condition where decisions that were previously correct turn out to be wrong.
The classic non-business metaphor for this is the case of generals fighting the last war. Examples of this include generals that were schooled in the art of warfare letting cannons shred their marching infantry and machine guns decimate their cavalry because they did not immediately recognize and understand the changes in their environment. Their experience had created blind spots to the changes happening around them.
Experience can cause blind spots in business, as well. It’s easy to be lulled into a sense of security by previous successes and lose touch with the realities of the marketplace and the internal operations of the business. To avoid “fighting the last war” in a business context, business owners and managers need updated facts about their market and their internal operations.
Is your business getting these 8 essentials right?
Take the Assessment to Find OutThese days, business conditions change rapidly. To the extent possible, make decisions based on current, objective facts from good business intelligence. This will improve the chance that you will make the correct decisions and minimize the possibility of you “fighting the last war.”
- What do your customers really want from you and how are they currently making their buying decisions? Have you asked them recently?
- What are the value adds that your customers desire that you are in an excellent position to provide?
- What are your competitors currently offering to their customers and to your customers?
- Have your competitors changed how they go to market or their business structure (e.g. – vertically integrating or creating partnerships)?
- Who are your competitors, really? Have they changed?
- Are there better ways to market your product or service, or better markets in which to offer them?
- Are your costs competitive? Are there lower cost producers eroding your margins?
- How do your internal metrics compare with your industry?
- How do you know?
- Ask your customers how you are doing in terms of price, quality, and completeness of product and service offerings. Ask what you can do to improve their experience with you.
- Interview competitors and competitors’ customers to determine what your competitors are offering and why their customers are buying from them.
- Assess your competitive landscape to determine if changes are taking place in terms of vertical integration, offshore sourcing, onshore sourcing, strategic alliances, mergers and consolidations, new competitors, competitors leaving, new ways of going to market, and new markets your competitors might be addressing. You will need this information to make strategic decisions about your business.
- Assess your cost competitiveness and value proposition. If you don’t establish value, the only thing to talk about is price. If you are competing on price, you need to be the low cost producer. On the other hand, if you can add value to your product or service to increase the desirability of your offering to your customers. Costs, although still important, become less of an issue and value becomes much more of an issue.
.
Create key performance indicators for your business and various operations within the business. Organize them on dashboards, scorecards and ad-hoc reports so that decisions can be made with facts. Share as much as possible as deeply in the organization as you can to get everyone on the same page
