Data Points

donutlgA lot of businesses are successful for reasons they don’t quite grasp. They’ve just stumbled upon something that works and they’ve gone from there. Krispy Kreme is that company in my mind. They had something rare, people showing up with a light comes on for hot & fresh donuts. It was a uniquely southern thing. They’d grown for a generation. They had strong fundamentals.

But then they decided to try to open a store in every area of the country– and the special thing was lost. To me, Krispy Creme was a company that was successful but couldn’t quite grasp why. They’ve gotten away from what made them unique, and paid to price. At this point, they might be bigger, but they’re not as special as they once were. The thing that everyone loved about them, that they were uniquely southern, is lost.

sirius xmOther businesses have brilliant ideas but can’t quite seem to build the infrastructure, culture, or branding needed to truly thrive. I’d put Sirius Satellite Radio in that category. I used to love Sirius. I invested a huge chunk of my IRA in that company. (And made good money off them.) I loved the product. But the company itself just couldn’t manage in a rapidly changing ecosystem. They over-invested in the one technology and couldn’t see the value of a cheaper one emerging.

Great product + Mediocre management = Locked into the wrong stuff

For Sirius, they lead the way on streaming mobile media. But they got hopelessly financially locked in to the satellite part of their business, then locked into major media contracts, then moved away from consumer electronics to mainly being something that shipped with a car. (i.e. the price point got lost)

Meanwhile, the consumer market exploded with streaming media over the internet. Pandora and now iTunes Radio pretty much put them into mediocrity.

So Sirius is a company that launched with a great idea… streaming media anywhere… but failed to dominate the market they invented because they bet on the wrong things.

Stupid is as stupid does.

bchomepage-sketchStill other businesses stumble and fumble around for a while, doing OK but not thriving, until they land on a product that explodes. Both Basecamp (formerly 37signals) and Mailchimp (formerly The Rocket Science Group) are perfect examples of this. They were both design agencies who developed a product to solve client problems. For Basecamp, that was project management. For Rocket Science Group, that was email marketing.

mailchimp-byeWhat’s unique about both of those companies is their ability to look at data and pivot. It wasn’t that they weren’t great design agencies or engineers… it’s that they looked at the data, recognized that a product took off, and they allowed the success of that one product to reshape their entire company.

In 37signals case, after 10 years of being 37signals they’ve actually changed their name to Basecamp. (Mailchimp is still officially The Rocket Science Group, as they’ve continued to develop and acquire stuff.)

The Magic of Actionable Data

What the difference between a smart business and everyone else?

Data. 

Smart businesses have data points to measure things that matter. They are counting more than dollars. They want to know why money flows one way or the other. They want to how customers are using their product. They want to see what customers are creating. They spend time and money getting to know their customers, doing ethnography to discover the things people do with their product but don’t even know they do with their product.

But it goes beyond data collection. Successful businesses take the time to understand what the data means and then do something with the data.

What’s This Got to Do With Me?

It shocks me how little data is collected by non-profits and churches. Most only measure two things.

  1. Attendance
  2. Dollars

Don’t get me wrong. Those are good data points. But those are both backwards looking. They are looking at where you’ve been instead of helping you decipher where you ought to go. And realistically… very few organizations do anything with those two pieces of data.

When was the last time you got a contact from a church or place you volunteer that said, “Hey, you missed last week. Is everything OK?” Or how about, “You normally give $200 every month but last month we didn’t receive anything. Is everything OK?

See, if you are collecting data but not acting on it you are just noting history, not managing your present reality or future.

What else should we be measuring? (As a church, non-profit)

  • Outcomes (of teaching, of programs)
  • Takeaways (what people learning, what people are implementing)
  • Follow-ups (what are people responsive to, what are you hearing when you follow-up)
  • Entry points (how are people finding your organization, who introduced them to you, what was their first experience like)

Less Intuition, More Data-Driven Pivots

Perhaps the thing that freaks me out the most about non-profits and churches is the reliance on intuition more than data.

I see new ideas pop-up all the time. So then I follow-up with a conversation that goes like this…

Why are you doing this new cool thing?

Oh, it came up in a meeting and we’re going for it.” or “We see lots of people doing ____, so we decided there needed to be a _____ version of it.”

OK, so why are you doing that?

Isn’t it a great idea?

Yeah, it’s pretty cool. But why are you doing it? Did you learn something that pushed you this direction? Like, why are you doing it?

Just because you have an idea and just because you have the power/resources to pull it off, doesn’t mean it’s worth doing.

Here’s my promise: If you’ll make more data-driven decisions and less intuition-based decisions, you’ll succeed more. 

By Adam McLane

Kristen and Adam live in Ahwahnee, California.

1 comment

  1. Adam, this is SO good! As a guy who relies heavily (and usually with a measure of success) on intuition, the reminder that data points are more reliable is a vital reminder. Thank you!

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