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Wednesday, August 24, 2011

Analytics, Vision, and Reality Checks



I got another question about analytics from a business owner who was thinking about adding social media to her toolbox. She wanted to know what analytical tools she should be acquiring...even before moving beyond her website.

I’ve decided analytics are seductive, because they offer the promise of buying some packages and then knowing more. That should be a lot easier than writing blog posts, so that’s why we want them.

I know several weekend golfers who say, “There is nothing wrong with buying new equipment to cut strokes.” The only problem is, it seldom works. Playing three times a week improves my handicap.

A long time ago, Jack Gates challenged me, how did I know a blog post went to 200,000 people? “I count,” I replied. He subsided.

A week later he told me one of his posts went to seven hundred fifty thousand people. I didn’t ask. I already knew how he knew.

In a factory, a good manager can often tell me things about the customers that shape strategic direction. Owners think I’m a gifted consultant because I seek out their best managers and ask them.

Toys’R’Us was famous for putting in a cash register system that replenished inventory, which led to fewer out-of-stocks, and created more overstocks. They then had to solve the new problem.

I see analytics as an occasional tool, which when needed has delivered incredible insights the first time. Second time, not so much. Third time means calibration error.

Put another way, if you measure the wrong things, you get the wrong answers.

Google uses analytics as their sales tool. Analyze until you think you’ve discovered something, then place some bets to see how good your analysis works. Who knew placing bets on adwords would be a billion dollar business?

But in Google’s business operations I see some other tools that are possibly more valuable than analytics, especially where analytics is the wrong tool.

The first is vision. What should be?

Once you establish what should be, having somebody create it goes pretty quick.

I also see Google is quick to buy core or accessory technology as soon as they know they need it and find someone who’s got it.

Make or buy decision, increasing speed to market. That’s business 101.

I enjoy reading opinioners declare Google products failed. That’s usually because they don’t understand what just happened. They like completed stories, commonly agreed facts.

The innovator’s way is to improve the offering. Whether the press thinks something is a success or not is of little value.

How can you tweak the carb and change the tires to knock a half second off the run?

And then do it again?

The third tool is the reality check. My best example of a reality check was intoned by the Reverend Johnson in the management training film Blazing Saddles (caution bad words...it's Mel Brooks!) No matter where you are in the process, you need to keep one eye on the goal line, as especially these days, goal lines have a habit of changing.

So there you have it. As much as we hope for magic analytics, the right analytics work best with the right vision and an ongoing reality check.

Or as my favorite yogi has written, “You can observe a lot just by watching.”

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Sales Lab’s Rainmaker series returns to the Capital Technology Management Hub, Tuesday, September 13th with 300 seconds of MarkYour Territory. The featured CTMH speaker will be Professor Steve Gladis, author of The Agile Leader. Come join us!

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