Extracting useful information about your business journey from the numbers on the dials of your dashboard is one of the most important tasks of the business owner. Why? Well, because you’re the driver! When you are stunningly successful, you can sit in the back being chauffeured around by others whose job it is to read the dashboard for you, but in the early years the likelihood that your business will succeed or fail rests largely with you. Managing a start—up business is hard and the decision to do so is indicative of your bravery.
To bake a tasty cake, you need decent ingredients; no rotten eggs please. So it is with your analysis. The data that you collect must be the right data in the right format, otherwise you can do the world’s greatest analysis and still end up with information that is wrong. Establish systems within your business to collect the most important data that you need to keep your finger on the pulse of your business and then delegate the responsibility for collecting and collating. The best people to collect the data are the people who do the work which generates that data. Put your effort into establishing your business systems and then oversee those activities rather than wasting your time micromanaging them.
Once your data is collected the process of analysis ensures that those data are put into context to provide you with meaningful information, to get the value out of the effort. The analysis process itself can range from something as simple as a visual check, for example, that something is where is should be or looks like it’s expected to look, through to complex statistical analysis.
The most common calculations performed by businesses are the generation of averages and percentages. But beware, the old phrase ‘Lies, damn lies and statistics’ can catch you out if you don’t keep your eyes open. Analysis is one of the management tools available to you and like every tool, it’ll help you do a good job if you use that tool correctly, but there are pitfalls. If all you do is look at your goods, then you will know little about their weight. If all you do is work out the average rate of production, then you’ll know little about how that rate fluctuates annually. If all you do is count the pages of the document that you’ve written, then you’ll know little about the quality of the content. Keep asking yourself if you are looking at the right things to help you steer your business, and if things need to change, then change them. After all, you’re in charge.
Data in context will yield information
The primary function of management is to make informed decisions, to think about the business and make plans for what to do next. The best fuel that you can get for thinking is information. Sure, supposition, gut feeling and guesswork will burn in the fires of thoughtful planning, but they produce little in the way of useful light and there is often lots of acrid smoke! Information is the clean—burning fuel of optimal thinking, keeping the engines of your business humming along and bathing you and your people in a warm glow. Right, enough with the colourful imagery.
If you are not using information to make your decisions then you are merely guessing and expressing an opinion. Opinions are like noses; everybody’s got one! You will hear people say that ‘Everyone is entitled to their opinion’. Rubbish. If you are running a law firm, would you wander out on to the street and ask a random passer—by for their opinion regarding which way you should defend a case? No, that would be stupid. If your business supplies bullets to the military, would you ask your local butcher which calibre you should be producing? No, that would also be stupid. You get the idea.
As the writer Harlan Ellison said, ‘You are not entitled to your opinion; you are entitled to your informed opinion. If you are not informed on the subject, then your opinion counts for nothing.’ If you want your business to survive the early years, steer away from opinions and focus on being informed. Think, don’t guess. The survival of your business depends on it.
In this chapter, we’ve covered how we can analyse the data generated throughout your business to produce the information required to fuel your thinking, producing informed decisions and plans that can be used to steer your business. This is the last of TINA’s four sectors. But TINA is the management steering wheel, with the emphasis on wheel, and, as such, is circular. Being a wheel means that TINA’s last sector (Analysing) feeds directly back into the first (Thinking).
Thinking requires information and this must be made available to you and your team in a way that best facilitates the decision making process. Information feeds thinking to produce plans. Plans are communicated, resulting in their implementation and successful achievements. Your achievements are measured, producing numbers on the dials of your dashboard; your data. These data are analysed to place them into context, producing information, which feeds into your management thinking. And thus the management steering wheel turns. As long as your business exists, there will be a requirement to steer it and TINA can help you to do that.