This column is part of Globe Careers' Leadership Lab series, where executives and experts share their views and advice about leadership and management. Follow us at @Globe_Careers. Find all Leadership Lab stories at tgam.ca/leadershiplab
Behind the scenes of the biggest companies, big data is driving a lot of decision making. Corporations like Walmart are collecting huge swathes of data about customer behaviour and are using the findings to boost online sales by 15 per cent. UPS leveraged big data to save 39 million gallons of fuel.
As a small or medium business owner, you might ask, "Who cares?" Without a huge consumer base, multi-national platform, or extra cash to inject into R&D, the concept of big data is just not applicable.
However, small businesses can concentrate on collecting different metrics that have an impressive impact on the bottom line. I call it little data. It's easier to collect and it's a great way to take the pulse of your company on a day-to-day basis.
Here's how to find the little data that matters, so you can make impactful changes to your business without spending a fortune.
Sweat the small stuff
Looking at traditional metrics – sales revenue, cost of customer acquisition and overhead – is important, but it's also worth tracking intangible elements that don't make it onto a spreadsheet.
I like to look around the office and focus on the energy – is there a buzz or are people bored? – or I'll look at notes from exit interviews to see who is leaving the company and why. Keeping this little data in mind has enabled us to make important changes to our culture when we need to.
External feedback is powerful, too. Whenever I'm in a new city, the first thing I ask my taxi driver is, "Who would you call if you needed your junk removed?" I'm not just making conversation or trying to name-drop one of our brands – I'm doing my own survey to see if our marketing efforts are sticking.
Chinese appliance company Haier took this one step further: When it heard from its technicians that rural customers were clogging its machines by using them to clean vegetables, they took that feedback and created a profitable new washer for clothing and sweet potatoes! It just goes to show that looking beyond the numbers can lead to surprising innovations.
Pick metrics that matter
At the same time, you can't run your business on anecdotes, so focus on key numbers that provide meaningful insight and measure them consistently. By taking that a step further and communicating these benchmarks, everyone in the company can understand and can react quickly to fluctuations.
Our key metrics are call volume, website traffic, and jobs completed. We also work on our "customer wow factor" by looking at our Net Promoter Score (NPS), asking every customer how likely they are to recommend our services to a friend.
Every company is different, so find the simple metrics that align with your "why" and track them. It will pay off: Companies that track their key numbers have double the year-over-year net income growth compared to ones that don't.
Don't be a data hoarder
7-Eleven Japan helps store owners make better inventory decisions by providing them with comprehensive daily sales reports and weather forecasts that could impact customer behaviour. The result? Thirty years as the most profitable retailer in Japan.
Knowledge is power, so give stakeholders access to the data you collect. We share our numbers at our daily huddle, a company-wide meeting. Our friends at Zappos do the same thing with their NPS, posting it daily, so it can be seen by everyone. Easy access and clear communication means the whole team stays informed about the brand's goals, making problems easier to spot – and quicker to fix.
Don't get me wrong – big data definitely has its place. Companies like Amazon and Netflix have built their success on the ability to track and apply huge amounts of customer and supplier data using complex algorithms. But the data and metrics don't have to be intimidating or complex. The rest of us can – and should – be leveraging little data, too. After all, if you track the little things that matter, big change can follow.
Brian Scudamore (@brianscudamore) is the founder and CEO of O2E (Ordinary to Exceptional) Brands, which includes companies like 1-800-GOT-JUNK1-800-GOT-JUNK?, WOW 1 DAY PAINTING, You Move Me and Shack Shine. He helps others grow small to medium businesses and corporate culture.