Trust Your Gut…Unless You Have the Data: Data-Driven Decisions
By Billy Jennings on 3/1/22
Referencing If You Market Podcast Episode #156: Should You be Making Data-Driven Decisions?, with Nick Amabile
Arguably the hardest part of owning a business is making the tough decisions necessary to keep things flowing in the right direction. While some choices are as easy as black and white, others require a deep dive into the numbers before making any concrete decision- especially one that can swing the entire direction of your company. In this episode of the If You Market podcast, host Sky Cassidy sat down with Nick Amabile of DAS42 and tackled making data-driven decisions on the business.
Business decisions, especially those made without thinking them through carefully or gathering enough data and evidence, cannot be made hastily. It’s certainly not rocket science, but at the same time it feels like while some embrace data, others see it as overwhelming and revert back to their gut instincts.
DAS42, DAS stands for Data & Analytics Services, is on a mission to help companies make data-driven decisions. Nowadays, some technologies do the job, but what separates DAS42 from the rest is the human element coupled with the data. “Computers are great, but humans are vital to the equation.” as Nick said. Technology is relatively standardized and technical and can genuinely hinder data acquisition. Having an actual person chime in from time to time with their instincts and relevant experience makes really takes the data element to a higher level. Sometimes numbers only tell a portion of the story. Business owners might think to themselves “Well, I’m making money, the business is growing… what else do I need? Obviously my decisions to this point have worked.” Here’s what Nick has to say on that: “Understanding a trend in your business using data that helps develop your gut and hone your instincts so that you’re able to make decisions quickly based on data… it’s a yes.” It sounds like Nick is really trying to say that we’re all taking risks in business right? So why not mitigate those risks through data? Not only that, but discovering a trend accidentally through observing data could increase one’s bottom line as well because it may shed light on who/how/what is the best application of a certain product or service, and you can double down on your efforts in that area by allocating resources from areas that are not seeing results. There’s a big difference between running an ice cream stand and seeing an empty tub of chocolate at the end of every shift and knowing that’s the most popular flavor and running a nationwide chain of Dairy Queens and doing a deep dive into what is selling the most/least so you can allocate your $20,000 digital ad spend to build an offer that your audience will respond to.
Like in most research, DAS42 takes in qualitative and quantitative data to help companies solve their troubles. Nick also referred to “catastrophic data-driven decisions,” which are basically misinterpretations of data that lead to poor choices. We do it all the time on a personal level with our taxes or a mechanic for our car. Sure nobody knows our finances or our car like us, but to get really granular and get deep under the hood, it’s best to let an expert handle it before you cause more problems.
As a business owner, data literacy is as important as knowing the ins and outs of your business. Understanding what data means, what data is telling us, and how it’s defined is the key to making data-driven decisions. Not to sound overly redundant now, but hear me out. There are many unique technical terms for every field or business.It gets even more confusing when we might have different definitions for the same terms. Nick mentions, “What was revenue yesterday for our company? You might have a slightly different viewpoint on what revenue means than I do. You might be in the accounting team and that’s way different than what I would call for revenue. Of course, revenue does have a specific accounting definition but being able to say, okay, here’s what exactly we mean by revenue. Here’s what we mean by customer and order. Like doesn’t include tax doesn’t include shipping. Is it somebody who purchased 20 years ago, or is it somebody who purchased yesterday? So all these kinds of nuances when you actually look at data create a lot of confusion. And so I think what I see a lot of times is folks talking past each other when they’re working with data and they’re looking at the same report with the same numbers and let’s assume we agree on those numbers for a second. We may not actually understand what the numbers are actually defined as and what they mean. So we’re not able to then agree on a common framework to actually make decisions from.” — Bridging the gap between the old school business acumen and cutting edge technology gives business owners the best chance to win. DAS42 makes sure that everybody is on the same page.
When we hear the word data, commonly, the first thing that comes into our mind is numbers. True, numbers. But in making data-driven decisions, we might go wrong because we tend to treat data robotically, therefore, coming up with wildly inaccurate conclusions, as Nick has mentioned. As a part of data literacy, business owners must understand what these numbers stand for. Are they high or low, good or bad? It all, again, boils down to understanding.
Aside from using data to make decisions, it is essential transparency within the company. At some point, we might encounter differences in how we interpret data which Nick addressed as storytelling of the data: “I think is kind of underrated but you know being able to provide enough context and to draw conclusions from it and to you know also allow folks to make their own conclusions from data as well because we’re all going to interpret things slightly differently.”
In terms of company size, since Sky mentioned how some small businesses tend to crunch data and come up with wrong conclusions, Nick addressed the situation by prioritizing speed and accuracy. If you’re one of the small business owners, don’t fret because, as Nick said, nobody has this stuff figured out on the first go. Is it easier to work with more prominent companies? “No, I don’t know if it’s easier per se. They’re very different challenges and I think I alluded to this before because bigger companies, they have, you know, again it’s not a technical challenge, it’s more of a sort of people process, organizational type challenge where you have such a diverse set of stakeholders and larger companies and you have to really work cross-functionally and understand how to get things done, which can be difficult in large companies, whereas smaller companies, it’s great to work for small clients a lot of times because you know you come in, you’re like, hey, can you fix this? And we’re like, yeah we can fix this and we go away, we fix it and knock it out of the park, right? Like and then bigger companies, the stakes are higher, the complexity is higher. Again, not from a technical perspective, and really that was how we were able to make that transition from smaller companies to larger companies was because of the fact that it is so similar.”
Nick Amabile studied economics in college and is the CEO of DAS42 — a business consulting firm, not an I.T. consulting firm. “The lesson that I’ve really learned over the years is how to be a better consultant right. Because I’m a data and analytics practitioner. I’ve been doing that for a long time and that’s what I’m passionate about. I love helping customers solve problems with data and analytics but you know becoming the consultant where you can manage expectations and timelines and budgets and communication and stakeholders and all this stuff that was a learning curve for us. You know we were able to kind of get it up, you know, get up that learning curve relatively quickly and now you know I’d say we’re quite good at it.”
Meta Description: In this week’s episode of the If You Market podcast, Sky Cassidy tackled the importance of making data-driven decisions along with Nick Amabile of DAS42. Acquiring, synthesizing, mainly anything that has to do with data, can be tricky, but it doesn’t have to be complicated. And it is undoubtedly worth the while if it is for the betterment of the business.