At one point or another, most small business owners have had to rely on gut feelings to make an important decision. But no matter how good their instincts are, no one can afford to run their business on intuition alone in today’s competitive landscape. Even if a decision feels right to an owner, having solid data to back it up gives them (and their team) more confidence in their choices.
Chaos Without A Compass
Before I discovered EOS®, I ran a company with 650 employees. Without a compass to guide me, I sometimes felt like I was spinning my wheels and guessing what to do. I admit there were days when I let my heart make business decisions that maybe weren’t in the organization’s best interests. It turned out I needed objective numbers to help me make better decisions based on facts, not just feelings.
But once I had the most important numbers at my fingertips, it took the guesswork out of business decisions. That all started with understanding which numbers would give me an absolute pulse on the health of my business. Using the tools and disciplines in the EOS Toolbox™ helped me find and track those numbers.
I’ve heard plenty of other business owners share stories of similar experiences. From ill-fated deals to keeping an expert (yet toxic) person in their organization, I’ve learned that results may vary when owners let their emotions alone call the shots.
The Benefits of Making Data-Driven Decisions
Since becoming an EOS Implementer®, I’ve had many clients throughout West Michigan experience incredible success just by measuring what mattered most to their organization. Here are just a few of the benefits they experienced by making data-driven decisions:
- Improved Efficiency and Productivity
Data provides insights into business operations, allowing owners to pinpoint inefficiencies and areas for improvement. For example, regularly analyzing sales data can reveal which products or services are most profitable and where pain points in a process may lie. By understanding what works and what doesn’t, business leaders can streamline processes and reduce waste.
- Enhanced Customer Experience
Customer data, including purchase history and feedback, can help businesses understand what their clients value most. Using this information and industry trends, business owners can tailor their offerings to meet customer needs and preferences. This results in more personalized marketing efforts and improved customer service, leading to increased loyalty, which is a cornerstone of long-term success.
- Risk Mitigation
When decisions are grounded in data, it significantly reduces the likelihood of costly mistakes. Analyzing data trends can reveal potential pitfalls before they become critical issues. For example, tracking cash flow trends may signal upcoming financial challenges, allowing owners to take corrective action early. This proactive approach helps owners avoid potential risks and maintain financial stability.
- Informed Strategic Planning
Data-driven insights are invaluable when planning future initiatives. Whether launching a new product, entering a new market, or adjusting pricing, reliable data grounds decisions on objective evidence rather than speculation or chasing “shiny stuff.” For long-term goals, using data to inform decisions leads to better investments and improved positioning against competitors.
EOS® Tools
Implementing EOS® gave my clients the real-time, objective information they needed to optimize operations, enhance customer experiences, and drive growth. Here are just a few of the simple, proven tools they used to gather data for their companies.
Vision/ Traction Organizer®
When working with a new client, I walk them through the 8 Questions on the Vision/Traction Organizer® (V/TO®) and outline their Core Values and Core Focus. These serve as the North Star to staying true to who they are and what they love to do and are best at as a business.
Next, we create a clear vision of the organization’s success by examining the big picture and defining its long-term goals. Then, we break down the process into manageable steps, building a three-year Picture, a one-year Plan, and Quarterly Rocks.
Completing the V/TO® provides the leadership team with ambitious yet achievable numbers to work toward.
Scorecard
If you’ve ever taken a road trip with an “Are we there yet?” passenger, you know the importance of measuring progress. Business owners need information to determine whether their organization is headed in the right direction and to identify any potential issues quickly.
The Scorecard does just that by tracking numbers related to finances, performance, and core processes. Like a GPS, every number helps point the way toward future success by tracking progress weekly. The consistent monitoring also provides early warnings if the organization begins to veer off course.
The People Analyzer®
Evaluating people is difficult. Without objective metrics for hiring, firing, and promoting team members, owners can easily rely on gut instincts alone. The People Analyzer® cuts through the complicated emotions surrounding team member decisions.
It measures how well an individual exhibits the company’s Core Values on a spectrum of always, sometimes, and never. Then, it looks at the person’s role and if they Get, Want, and Have the Capacity (GWC®) to fill their seat.
The People Analyzer® provides owners with the information to decide whether to hire, fire, or promote an individual.
Best Practices for Using Data to Run Your Business
Transitioning to a data-driven culture requires a mindset shift and the right tools. Here are a few steps to get you started:
- Invest in the One System
You need one operating system that covers every aspect of running your business. EOS® provides you with a complete system of proven timeless concepts and practical, proven tools.
- Establish Clear Goals and Measurables
Establish clear, measurable goals to define success. Tracking the measurables on the EOS Scorecard that support these goals gives you a weekly progress report. These goals also keep everyone on the same page, driving toward common objectives.
- Adjust Your Scorecard As Needed
Creating a Scorecard is not a one-and-done effort. Instead, you should review your Measurables. As a team grows, these should naturally change. Are they too high? Too low? Are these the right numbers to give you the necessary information to make good decisions?
- Everyone Has a Number
For data-driven decision-making to be effective, everyone in your organization should have a stake in the game. That means everyone has a number, a Measurable, that they’re responsible for reporting each week that directly or indirectly moves the business forward.
Making the Numbers Work for You
Don’t rely on gut instincts alone to run your business. Using the tools and disciplines of EOS® can help you make better data-driven decisions in your company. I can show you how tens of thousands of other companies have used EOS® to make better decisions based on facts, not feelings. Ready to stop leading with guesswork and start using hard facts? Get a copy of the latest book in the EOS® Mastery Series, Data: Harness Your Numbers to Go from Uncertain to Unstoppable.