Avoid Drowning in Information:
Ask the Right Questions
Information is available to us 24/7--too much information! In their
2011 book with the puzzling title, Drinking from the Fire Hose: Making
Smarter Decisions without Drowning in Information, Christopher J
Frank and Paul Magnone suggest that when you need to make business decisions,
answer seven key questions to avoid drowning in the information pouring
from "the fire hose."
"What is the essential business question?" When you have too
much data, pose the essential business question for that situation and
clarify what data you need. According to the authors, when the Eyjafjallajokul
Volcano erupted in Iceland in 2010, experts unnecessarily urged grounding
airplanes eight hundred miles away in the UK. The experts used "predictive
data" without considering, "What concentration of ash will obstruct
the view of pilots?" A transportation crisis ensued. Formulating and
then asking the essential question will help you focus on the right
data. This question should be prescriptive, not descriptive, and the
response should be a "business action." This question helps you isolate
what you need to know to act appropriately.
"Where is your customer's North Star?" Position new initiatives
in terms of what they mean for your customer, not just your company's
bottom line. How will decisions, such as dropping an old model, or changes,
such as price increases, affect your customers? Look at facts, circumstances,
and situations from the customer's point of view. What guides your customers?
Should you believe short-term data--"the squiggly line" on a graph?
Just as a decline in earnings in one quarter doesn't necessarily mean
you should sell stock, short-term sales results may not warrant a major
change in your strategy. Take a long-term view. Are the changes in data
real or "just noise"? Where can you find examples of meaningless short-term
data? Baseball statistics, say the authors.
"What surprised you?" Look at the actual numbers, not the numbers
you expected. Question what outliers mean. You are more likely to find
opportunities in the irregularities in the data than in the numbers
that "conform to expectations." In a study we completed for a networking
company, about ten percent of the companies were not renewing contracts
because they were migrating to another platform. These outliers were
harbingers of an emerging trend. Our client also needed to migrate to
the new platform.
What potential problems are apparent from the data? Lighthouses
expose dangerous rocks. Ask key questions that will cast light on looming
problems or threats to your business. Then, develop a response to the
threats. Data out of context may not seem important. A small dip in
sales may not seem meaningful, but is meaningful when compared with
a significant increase in a competitor's sales.
"Who are your swing voters?" This term refers to "the silent
majority," the customers who are somewhat satisfied but could easily
become dissatisfied or vice versa. These customers in the middle represent
the "biggest opportunity for low-cost growth" if properly segmented
and approached with targeted messaging. Do not be overly attentive to
those who will buy anyhow. Ignore those who will never buy. Focus on
making members of the silent majority who are favorably disposed towards
your company into loyal repeat customers.
The three W's: "What?" "So what?" "Now what?" Obtain data and
then analyze the data to ascertain, "What does it all mean?" and "What
actions should you take?"
- "What?" encompasses asking the essential question, identifying
the customer's North Star, and questioning the squiggly line.
- "So what?" encompasses "What surprised you?" "What does the
Lighthouse reveal?" and "Who are your swing voters." In other words,
"What does the data mean?"
- "Now what?" Having collected and analyzed data, what steps
should you take?
Most of us "go looking for what we want to find, not what is really
there," Frank and Magnone observe. The above seven questions will help
you identify what you need to know (essential question) and also help
you separate important from unimportant data. Most importantly, this
approach will give you a customer perspective (customer's North Star)
and expose hazards that are in your way. Finally, this process will
help you decide what actions to take.
We provide customer intelligence for growing companies.
Copyright © 2/13 Ruth Winett. All rights reserved.
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