Thoughts | Apr 4
I like to think of myself as a strategic thinker and visionary. Ego-checking voices in my head tell me I shouldn’t say that because it sounds conceited and perhaps those labels should be given to me, not claimed by me. But I do feel comfortably humble saying that I’m a future thinker. In other words, I think more about what could be than what is or what was. I’m a dreamer.
Most entrepreneurs like me are dreamers too.
I’ve always been this way. And no matter the stage of your career, you should embrace your inventive spirit. We need more visionaries and fewer doubters in our world these days.
Just don’t get too carried away following your instincts alone. Use experience and data to sanity-check what your gut is telling you.
Twenty years into my career with one very successful outcome and one failure, I certainly have experiences to draw upon that support the future-state(s) I propose to my team and our partners. And as an engineer, I’m okay at using historical data to temper the outlandishness of my visions.
But in my first company, gut and vision was really all I had. I’d put “reliance on my gut” high up on the list of the reasons I ultimately had to shut that business down. And if there’s one thing I learned during my nine years at HubSpot, it’s that data is the key to making informed prioritization, hiring and investment decisions.
If you’re anything like me, don’t wait until it’s too late to get more data-driven. I wish I had data-discipline in my first company. I certainly won’t make the same mistake as CEO of Databox.
Here’s five steps you can take to stop relying on your gut and start using data as an input for more of your decisions:
1. Track Metrics You Can Easily Access
If you sit down with a business consultant, the first thing they’ll ask you is, “What are you trying to achieve?” While an important first question to ask, too often they make an error in their next question, “How can we measure that?” The problem with that question? Measuring a dreamed-up stat usually requires your team to go to great lengths to try and uncover that data in your system, or worse, they create a new process (aka busy work) so they can start capturing the data that precisely measures progress to your unique goal.
Sound familiar? It does, doesn’t it? In fact, you’re so accustomed to working this way, you’re either about to stop reading my “bad advice” or you’re sitting there thinking, “What the hell should we do instead?”
I’ll tell you…
Instead, you should log into the software you’re using and see what they’re measuring for you automatically. Chances are, the people who built that software interviewed 10s, if not 100s of companies like yours to figure out how and what data to capture.
If you’re not yet using software to measure everything in your business from sales to service and human resources, you probably need to get with the times. If you’re a large company who has customized a bunch of expensive enterprise software, it’s time to break the cycle. Your tendency to treat your company like a special snowflake is wasting time and money.
2. Start with High-Level Metrics
Don’t get lost in the details.
As an entrepreneur, I love to build things. I love to build first-of-a-kind systems and processes. When I do this, it’s easy for me to get lost in the details.
For example, instead of worrying about how much traffic and new users our content marketing is getting us, I’ve been obsessed with how many qualified prospects we’re engaging because of it. But, that’s hard to measure. (It’s possible with attribution reporting.) But, certainly not necessary given Databox is pretty early in our commercial development with only thousands of new users per month.
It’s better for me to just spend my time and my team’s time creating more content. Now that I’ve hired a marketer, I’ll want him focused on simply growing our traffic volume and user signups. More than that isn’t necessary anytime soon and when it is, it’ll be a good metric for him to track and improve, while I stay focused only on measuring his throughput.
3. Only View Data That Inspires or Informs Action
Recently, a marketing executive told me a story. He had a marketing analyst on staff who used to send out a marketing report with a few key pieces of data from google analytics to the whole staff every Friday. Unfortunately, his analyst left the company and he assigned reporting to someone new.
The new guy sent out a spreadsheet with 750 rows and little analysis or context. The marketing executive’s peers were livid. He received messages like, “I don’t have time for this!”
Raw data doesn’t help much. When most humans log in to Google Analytics, they get lost quickly. Cutting and pasting it into a spreadsheet is even worse than logging in, since all context is lost.
So, what should you do instead?
When sharing data, it’s important to define the action you or your team might take from it. Most of the time, you should share just a few metrics. And for the KPIs you choose to share, the data should show progress to date against goal and versus historical performance. The questions most people will want to answer are, “Are we doing better than before?” and “Are we hitting our goal?” So, pick the metrics you want to improve and report only on them.
4. Delegate Data Analysis to the Doers
During the early years at HubSpot, we were all empowered to build and run our own businesses. Each month, we were asked to present the state of our part of the business, what challenges we were facing and how we were planning to hit our future targets.
Unfortunately, we only had one analyst on staff at that time, who wasn’t really made available to us. So, we had to do our own reporting and build our own models. While it was a bit of pain the butt, it did empower us to dissect and understand our business better.
Every month when I had to dig into my data, draw conclusions and devise strategies, I was forced to course correct. All. By. Myself.
If you’re a leader, don’t micromanage your team by dissecting their numbers for them. Don’t hire an analyst to analyze their business for them. Put them in charge of reporting and analysis and hold them accountable to doing it. Chances are, a monthly meeting is all you’ll need if you have the right people in the right seats.
5. Stop Running Reports; Monitor in Real Time
Let’s face it – reports suck. They take a lot of time to put together and format. Then, they’re immediately out of date. Instead of building a report-building culture in your organization, breed a data monitoring obsession.
Historically, if you had more than a few people on your team, you couldn’t monitor anything in real time. But, today — across marketing, advertising, sales and service — very little is (or should be) manual. Most everything is done with the help of some software. Therefore, activity and progress is instantly viewable from anywhere. The key is pulling the data together in one spot so everyone can monitor your business in real time.
When viewing data, get out of spreadsheets and powerpoint. Find a way to put data front in center, whether that’s via live reports accessible via your desktop or mobile phone or on TVs mounted on your office walls.
Don’t Abandon Your Gut, Just Help it Get More Informed
When building any business, vision is necessary. You could do what others have already done, but that would be boring and chances are you won’t build a big business copying others.
So, don’t abandon your gut. Use your instincts when it’s time to be bold. Your instincts have helped you get where you want to go until now and they’ll be at least partially responsible for your future success.
Over time, though, get more informed based on data. Use data to make sure you’re making progress in the most effective way possible.
There’s lots of talk about the “power of big data” these days, and obviously it’s evolving as a strong competitive advantage for many companies. However, when I council most companies on their use of data, I find it’s usually better to keep it simple. As CIO Magazine has said “executives value data, but have no idea what to do with it.” Some of it is because, as Stephen Dubner has noted, it pushes against the long-held idea of executives being able to “trust their gut” on decision-making. But, most of it is because companies over-complicate the process of definining KPIs, setting targets and tracking progress.
But, with a bit of discipline, the right software in place, and a bit of data, anything is truly possible.
Go make it happen.