Sailing to Success with Data-Driven Decisions
IMAGINE YOU ARE TAKING A SAILBOAT OUT TO SEA. WHILE THE SHORELINE IS STILL IN VIEW, IT IS FAIRLY STRAIGHT FORWARD TO COURSE-CORRECT THROUGH TRIAL AND ERROR USING THE LAND AS A REFERENCE. HOWEVER, IT GETS MUCH MORE COMPLICATED WHEN YOU CAN NO LONGER SEE THE SHORE. UNLESS YOU HAVE A COMPASS, YOU'RE LEFT FLOATING IN THE DIRECTION THE WIND TAKES YOU, WITH NO ABILITY TO KNOW WHERE YOU ARE OR IF YOU ARE GETTING CLOSER TO WHERE YOU WANT TO BE.
Running a business without meaningful insights into the decisions you make is a similar experience. How can you effectively navigate the competitive landscape and fast-pace of the modern business world without the ability to know where you are and how you’re performing? You need to know what levers to pull and how that action impacts the business. Essentially, you need a compass for your business.
The best way to help control the direction of the business is to measure key performance indicators (KPIs), analyse the results and make the appropriate adjustments. Feedback loops are important. By constantly making intelligent adjustments, you can gain control of where your business is headed.
One of the most powerful outcomes of tracking metrics is the ability to make data-driven decisions and rapidly respond to indicators in your business – whether good or bad. It’s easy to see that sales are down, but analysing the metrics earlier in the process can allow you to course-correct before a dip in sales becomes a significant drop.
Let’s disembark from our sailboat and look at another example:
Wood working is my hobby. I’ve heard the old saying “measure twice, cut once” more times than I can count. However, it never really sunk in until my gut said, “it’s fine” and the freshly cut board said, “I am quarter of an inch too short.” Because of a quarter inch, I lost two hours running out to the store for more wood so I could do it over again. Lesson (finally) learned: measure twice, cut once!
That was a lesson from a hobby; the stakes increase by magnitudes when you are running a business. When things start to drift, you need know about it and make changes before there’s a significant impact on the business. Knowledge comes from data – metrics, KPIs, leading indicators, etc. These data points tell you when things are starting to go awry.
Automating the collection of this data, along with a means to quickly visualise it, is your compass. As humans, consuming large amounts of data is much easier when we can look at a dashboard that presents the data in an insightful way and makes it obvious how we’re doing. The automation is a very important part of this equation. If it takes weeks or months to get the data into a consumable format, you may still be able to adjust, but the delay can be costly.
How do I get started? A good strategy is to start slowly and get a few key data points flowing end-to-end. With InRule, you have granular control to flag only what you care about. Perhaps select a few of the obvious metrics to get an idea of what is meaningful.
Visualise the data with an analytics tool and see what there is to learn. You’ll quickly start to uncover gaps (“If I knew the decision that declined the loan, we might be able to offer an alternative, which could still result in a sale.”) Then add that data point to the list. Rinse and repeat until you can have some KPIs that help you steer your business. Remember, the quicker you gain meaningful insights into your business, the quicker you can adjust and course-correct, as needed.
InRule Metrics With the release of InRule 5.4, we now offer the ability to output fields (“Which state are my loan applications coming from?”) and rules (“Which business rule is rejecting most people from the loan approval process?”) as metrics. This intelligence will allow you to make educated, data-driven decisions when adjusting rules to maximize growth and bring you closer to achieving your KPIs.
For further information about how InRule can help you make intelligent business adjustments, please contact us. We would be happy to help! *Original article: https://www.inrule.com/resources/blog/sailing-to-success-with-data-driven-decisions/