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Erwin Wodicka/Hemera/Getty Images/Erwin Wodicka/Hemera/Getty Images

Drinking From the Fire Hose

By Christopher Frank and Paul Magnone

(Portfolio, 22 pages, $31)

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Information gushes at us every day, with the intensity and wallop of a fire hose. We're not drinking in data so much as drowning under its unrelenting torrent.

"In our information-driven global economy, the real challenge lies in keeping your head above the flood of data, learning how to separate information from facts, and acquiring the judgment to use what you find to inspire others to act," Christopher Frank, a vice-president at American Express, and consultant Paul Magnone write in Drinking From the Fire Hose: Making Smarter Decisions Without Drowning in Information.

Their solution is to use seven strategic questions to help gain control. These questions are based on the authors' front-line experience in both small and big business over the past 20 years, with a coterie of startups and some iconic brands. The questions are battle-tested and practical, able to strategically guide you through the fire-hose flood:

What is the essential business question?

This helps you figure out what is the indispensable information you need to move forward. "Every successful business decision depends on the answer to one essential question. Without that question, generating data or studying the data you have is pointless," the authors observe. The answer to the essential question unlocks a series of important answers that helps direct your course of action.

What is your customer's North Star?

What do your customers need and want, and how do they behave with respect to your product and your competitors? The authors suggest you start meetings by talking about the customers, not the numbers. This sounds obvious – perhaps you feel you do that already – but they suggest that too often we scrutinize every plan for its impact on revenues, growth rates, and other metrics, rather than what will determine it all, the impact of our plans on the customer.

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Should you believe the 'squiggly line'?

We also tend to overfocus on the latest data, such as changes over the past two weeks in sales or stock prices – up or down a few percentage points. The authors call that the "squiggly line." But if you look at the data over a wider period, that movement may not even be visible, as longer-term trends predominate. You need to consider how relevant any short-term movements are to your long-term objectives, and be wary of being transfixed by statistical variation.

What surprised you?

We generally look to data for confirmation of things, and that can lead us to ignore important information that is at odds with our thinking. But the surprises offered by outliers in the data may contain early warnings of danger or hints at game-changing strategies. So pay attention.

What does the lighthouse reveal?

A lighthouse beam sweeps across the terrain, illuminating important features. Similarly, you need to find the important features – the four or five pieces of important data in the 100 scraps of information before you – that serve as your "lighthouse data." These will help guide your efforts and keep your team on course, in the same way as a lighthouse keeps a ship on course. This lighthouse data will be the metrics you need to watch in the days ahead.

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Who are your swing voters?

Elections are won by swing voters, those who are not strongly aligned with any of the political parties. In the same vein, businesses must pay more attention to swing consumers. The focus usually is on people at the extremes – either extremely satisfied customers, or the critics who will never switch to your brand. Instead, you need to concentrate on the middle ground, the swing voters, the potential customers you can win over or potential defectors you can retain. The authors urge you to categorize your customers as favourable, neutral, or unfavourable. Then take those neutral folks and divide them further into "leaners," neutrals or defectors; and begin programs to deal with each of those three sectors.

The Three Ws

What? So what? Now what? It's time to move toward action by reviewing the data, figuring out what it means, and deciding what to do next.

In essence, this is a strategy exercise as well as a guideline for handling data, and the authors show how to employ it with plenty of examples from their own experiences. This makes for an interesting book, helped by the fact we're not exposed to the same case studies that pop up repeatedly, but some new stories instead.

Special to The Globe and Mail


Harvard Business School Professor Deepak Malhotra has the answer to the question posed in one of the top-selling business books about change, Spencer Johnson's Who Moved My Cheese? Beyond naming the perpetrator, in I Moved Your Cheese (Berrett-Koehler, 103 pages, $22.95), Prof. Malhotra offers a rebuttal to what he calls "the great book," arguing that we need to not simply adjust to change, as Dr. Johnson's book counselled, but understand why it is forced on us, how we might exert greater control over our lives, whether the goals we are chasing are the correct ones, and what it would take to escape the mazes in which we are subject to the design of others. These are good messages, presented succinctly in the book's preface, but they get lost or diluted in his feeble fable of mice seeking to escape the maze.

Harvey Schachter

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