Everyone knows that a business succeeds or fails based on its bottom line. It’s surprising, then, how many leaders are uncomfortable looking at spreadsheets, graphs, and other metrics of profitability. Being able to gather the appropriate data and understand what it means are critical skills of effective executives. Failure to consider financial and operational data will put your change initiatives in far more danger than errors in implementation.
Effective leaders are known to be those who quickly understand the implications of business data and can apply it to operational advantage. Their decisions are financially sound and do not put the business in jeopardy.
Less effective leaders might never have learned how to effectively read spreadsheets and other data sources, so they are embarrassed by their lack of knowledge. As a result, they may depend on others to analyze and present the data, so miss opportunities or details that would impact their decisions. Or they might not even know what data would be useful to them for making decisions. In this instance, they might rely on “seat of the pants” decision-making. Everyone can cite examples of when this type of decision-making was successful. But, for the most part, the best decisions are data-driven.
If you are one of those executives who is intimidated by data, now is the time to rectify that lack of knowledge. Here are some tips to help you gain more comfort and skill in this area.
Good decisions are based on good data. And data can also tell you when your initiatives are going astray so that you have adequate time to make smaller changes instead of dealing with a catastrophe at a later date. Understanding and making use of data are not the only things that impact the bottom line of your business, of course, but they are a great start.