The quantity and quality of data available to retailers has grown exponentially in recent years, but many leaders are left wondering what to do with it. That’s a great question to ask because data, in and of itself, is useless. The value of data comes from turning the data into information and meaning that inspires decisions, behavior changes, and actions.
Data creates impact and value if appropriately used.
The only way to create impact (value) from data is to be proactive in its use. A simple and recommend approach is to have a goal or target, set the unit of measure, place a value on the improvement effort, and implement your plans. It’s easier said than done, but it is that simple.
We advise our clients to set performance improvement goals that are benchmarked against their current performance. Some easy to measure data is product ROI, turns, and salesperson performance. Once you pull the data together for a given period, you’ve got to do something with it for it to have an impact and create value!
For example, you might observe that Mary sells add-on products (e.g., socks or inserts w/ a pair of shoes) 64% of the time and Susan achieves a 36% add-on sales rate. It’s obvious that Mary knows or does something that Susan doesn’t do with her customers. In that scenario, you’d want to learn about Mary’s add-on strategy, encourage Susan to talk with Mary or observer her approach, and set performance improvement goals both individuals (pro tip: set aggressive goals around improving measures that are already good to make them great!).
Data can be everything if you practice turning it into information that leads to performance insights and major breakthroughs! The 4th quarter of each year for most businesses marks the start of strategy-making, planning, and budgeting. Some business leaders simply adjust last year’s budget by a few percentage points and impose it on their teams, but that’s an antiquated approach that’s sure to alienate team members and result in more of the same outcomes. Business leaders can and should do better!
Planning is equal parts science and art. There’s not a right way to do it, but the act of planning is often times what generates the positive business results (not the plan itself). That’s good news for novice planners because you can start preparing for 2016 by reflecting on a few open-ended questions.
Answering these questions will create a basic perspective on your organization’s future that can serve as an important foundation to creating awareness, understanding, commitment, and buy-in from your team. It’s important to be transparent with your organization about the upcoming year’s objectives so teams and individuals can align their goals and behaviors accordingly. If your people are unaware or don’t understand the organization’s goals, then you cannot be disappointed if they aren’t meeting your expectations. The best way to put your plan into action is to ensure your people are prepared to help!
- What are the top 3 most important challenges our business will face next year?
- What are the revenue and profitability expectations?
- What resource changes are expected next year?
- What external conditions are changing in our market?
- What do my employees need to be successful next year?