Numbers-Based Decision Making

I’ve got pretty good instincts for making decisions. Think about it. We all do. We make hundreds of decisions each day as we navigate our daily life and the vast majority of them turn out just fine.

My own self-history has taught me that I’m right more often than others in my cohort.

But that’s a double-edged sword, right? If you think you’re great at making decisions you get sloppy and start making ill-informed decisions based on your own arrogant hunches.

Over the past few years I’ve been working hard to drop my hard-earned arrogance and adopting a more numbers-based method of decision making.

Tracking Default Data

I’ve got this little catch phrase that I say to myself all the time. “It’s one thing to collect data, it’s another to know what to do with it.”

The first step in numbers-based decision making is deciding what information you’re going to track and what each part of that data means.

Let’s start by default data. Yesterday, the small company I help lead went public with a decision to stop selling our products on Amazon.com. Was that decision about a bias against Amazon? Absolutely not. As a company and as individuals we all really like Amazon, but the default numbers lead us to a fairly easy decision that Amazon wasn’t the right distribution partner for us. That was a decision rooted in default data. Big decision… but not a hard one to make.

For a company, default data is stuff like sales, customer traffic, customer leads and acquisitions, customer retention, inventory.

Sales down? You do something. Losing customers? You do something. Too much inventory? You do something.

For a non-profit, default data is stuff like program attendance, measured outcomes, new membership, donations.

Attendance down? Do something. Outcomes off? Do something. Donations down? Do something. 

This is all default data that every single organization needs to track and make day-to-day decisions based off of. Not collecting or have access to this information? Get on your giddy-up because you’re flying by the seat of your pants instead of making decisions on the information you need.

Values Alignment Data

The next part of making numbers-based decisions informs collecting other types of data collection that align you with your organizational values.

Let’s say that your non-profit values non-paid staff people having high ownership of your mission statement, “To make God known in Tuscon through acts of service.” How do you measure that? You would measure things like a members participation in service projects. Or taking a class on social action for change at a local Christian college. And you’d measure staff alignment by how they integrate this value into leading a Bible study or regular meetings with community service groups.

At The Youth Cartel, one of our organization values is that we want to embrace theological, ethnic, and gender diversity. Do we track these things? You bet we do. And we allow these values to inform a wide variety of decisions and course corrections along the way. And the main way we inform ourselves? Data.

Understand the Role of Bias

I think one of the most dangerous things for any company or non-profit is to go it alone. It’s normal and healthy to invite outsides, intentionally, into your deciton-making process… even when it’s just a simple numbers-based data decision.

Why is that? Because what data you track and how you interpret that data is full of personal bias! Bias isn’t bad. But, particularly when you’re making value alignment decisions… you need to see your bias, own it, see how it flows in and through your data, and take that into consideration when you’re making decisions.

Take Actions

The last, and I think most important, aspect of making numbers-based decisions is knowing how much data you need to collect before you can make a decision with real information.

Too little data and you’re steering your ship based on visuals and not a forecast. Wait too long and you’ve likely missed big, obvious opportunities while you collected data.

My advice? Systematize this. Look at it weekly or monthly, then make time annually (or bi-annually) to spend a lot of time digging into it.

Finally, don’t forget to act. There’s nothing worse than having all the information you need to make a decision but just not making the decision.

Don’t do that. That’s called failure.