Best Ways to Use Data in Making Decisions Bootstrapping a startup means making decisions on the fly from your gut, but there's a point where a company has to use data has to drive its calls.
Opinions expressed by Entrepreneur contributors are their own.
When you're building the next big thing in your basement, hoping for it to be the new Google, you need to make a lot of big decisions on your gut. And if you're lucky and get it right, you might find yourself running a real team soon.
As resources are scarce and there is never enough time, you must still rely on guessing a lot. But if you're really lucky with all that, a time comes when you run out of excuses and must look at the data. And you will need as much data as possible.
I've done all that. And now I'm running my own well-funded marketing department. I spend a great deal of my time making decisions. And often these decisions will affect the company, the team, and myself in significant ways.
That gravitas is why one needs as much reliable data as possible.To make sure these decisions are right and move the team in the right direction.
Being an efficient leader.
To be data-driven is to be effective. And efficiency is key for running a successful, high-performing company. Take a look at how Netflix uses all of the data it collects if you don't believe that.
If you want to be the best, you need to gather data about everything you do. First, from your teammates and peers, and then from every project, assignment or campaign that you run.
Related: How Companies Are Using Big Data to Boost Sales, and How You Can Do the Same
Getting data.
Grow.com writes, "Data helps you understand and improve business processes so you can reduce wasted money and time." You can choose the most efficient way to restock inventory, plan your sales cycle, and understand your customers. The question is, how will you get that data.
As a leader you have two sources you can and must tap into. The first is outside sources of information. The second group is a lot closer to home: it is called "your employees." And there are tools out there to get information from both of these sources.
Employees are one of the most vital sources of information you have. So, first you need to make sure they can provide you with the data that you need, when you need it.
Related: A Data-driven Case for Understanding the Impact of Employee Engagement on Retention
I use a combination of plans, progress problems (PPP)-based weekly reporting and weekly one-on-one meetings to stay informed. Of course, the private meetings with employees must be conducted online, otherwise one would spend all his time in meetings.
And using performance management apps or instant messengers lets me easily access the information I'm receiving and give feedback to employees as well.
Using data.
Getting data about customers and partners directly is a little trickier. As a manager of a marketing department, Google Analytics is, of course, closer to me than my best friend. And I spend more time with it than I do my spouse. But in order to scale a business, more is needed.
Lorna Keane writes in Globalwebindex that "deep consumer insight is now playing a more central role in campaigns of all shapes and sizes, keeping the ROI promise and focusing attention on the right audience." She shows that the best marketing campaigns are both innovative and data-driven.
Related: How Big Data Analytics Is Solving Big Advertiser Problems
Avery Schrader, CEO of Modash, told me, "In a broad sense, leaders need platforms and data in order to scale the unscalable. Popular tactics like influencer marketing are massively time-consuming without automation, the likes of which can only be provided by data."
Making decisions.
Of course, the more experience you get, the more you can (once again) rely on your gut. When you have more experience, you can make more informed decisions by default. But that is not a excuse to be overconfident. Being a leader means understanding that your gut is often wrong. And it means knowing that hard data is always worth more than your personal insights.
So, don't be afraid to experiment with different tools, different approaches, and different methodologies. It is the only way to get to a faster, better decision-making process.
