There is a saying that “the numbers tell the story” – and very often they do. A single graph can explain a company’s direction of travel, a table of data can give insight into the make-up of its business and a set of accounts should be able to reveal its profitability.
Readers with an accountant’s background – or anyone with an eye for detail – will know the value to be had from such data. You may even have a leaning towards using numbers above other, qualitative information (I hold my hand up – I too am trained as an accountant).
And data doesn’t just have high currency in the business world. In government decision making, nothing adds more weight than an eyebrow-raising statistic – and in the media, nothing works better than a graph or statistic to summarise a story. Data, lovely data, eh?
Reasons to be careful
“Numbers don’t lie”, the saying goes. But be careful. Relying exclusively on numbers won’t tell you the whole story of what is going on in your business, or the one you are working with or analysing, etc.
Many of us may love numbers, but not all data is numerical – “99 per cent of all statistics only tell 49 per cent of the story,’ is another saying.
Data won’t, for example, comprehensively answer important questions such as these:
- Is the business model appropriate?
- What is staff morale like?
- Are the company’s systems, and the technology it uses, effective?
- How is the business coping with current changes in its markets?
- What are relationships really like with suppliers and customers?
- What is the business’ full potential?
- Are the business plan and growth targets realistic?
And you don’t need to go to outside help such as consultants, peers or Google for answers. You just need to listen to the people working in the business, and to hear in detail what they have to say.
Genuine listening to staff has real purpose and benefits.
Listening to staff can, for example: collate fresh and undisclosed ideas for boosting a business’ growth, uncover where and why things may be going wrong and get staff support for any resulting business plans. It’s what we call uncovering a company’s “hidden value”.
Delving beyond the numbers and data
Recently, employees of a Manchester-based retailer told us “something strange” was going on in their employer’s business. The company’s reports were inconsistent and untrustworthy, and staff were suspicious of management. But more than that, he didn’t know. Neither he nor the data could explain what the issues were.
By going beyond the data, however, and listening to staff, we realised that the company’s situation was even worse than thought. In summary, the business was about to run out of money. And of course, once armed with the true situation, the surprised owner injected more cash to keep the company afloat. This prevented it from going into special measures or administration – which preserved thousands of jobs.
As the IT manager told us at the time: ‘In many organisations, employees know what the problems are, but fear to raise them for being seen as trouble makers. If you can get people to talk anonymously, you get good feedback to improve the company.’
What are the lessons?
Data is clearly invaluable to decision making, but be careful of over-egging it, and being blind to other information – which in our experience is there for the asking if asked in the right ways.
“Facts are stubborn, but statistics are more pliable,” said Mark Twain.
Simon Jones is founder of Hidden Value Partners.