Don’t drown in data: Transform information into a competitive advantage

Don’t drown in data: Transform information into a competitive advantage
3 minute read
Arne Maas, Jerome Hancock

Companies today face a deluge of information. But the real challenge isn’t gathering this information – it is making sense of it all. It’s about turning information into knowledge, and knowledge into action.

While many strive to be ‘data-driven’, this approach can be a trap. Without context or critical thinking, simply following the data can lead to poor decisions. Instead, companies need to be data-informed, using information strategically to guide human judgment and fuel impactful actions.

This is crucial because the gap between data and decisions is widening. Companies know they need to act, but the sheer volume of information can be paralyzing. Different sources tell different stories, which creates contradictions that hinder effective decision-making.

Your revenue management team might see a clear need for a price increase, while your innovation team may be pushing for a bold new product launch, and your brand communications team might fear a loss of market share.

So how can leaders bridge this gap and turn information into a competitive advantage?

It starts with understanding the challenges and committing to a holistic, action-oriented approach. To guide this journey, we’ve identified three essential principles for navigating the information deluge:

  • Embrace adaptability: Recognize that there’s no one-size-fits-all solution. Prioritize flexibility and tailor your approach to the specific needs and context of your business. This ensures your strategies and insights are truly relevant and lead to meaningful outcomes.
  • Focus on purposeful analysis: Go beyond simply collecting information. Ensure that every analysis has a clear objective and is geared towards answering critical business questions. Ask yourself, “What are we trying to achieve with this analysis? How will the insights gained drive action and contribute to our goals?”
  • Facilitate collaboration: Break down information silos and foster a culture of open communication. Encourage diverse perspectives and cross-departmental collaboration to ensure that all stakeholders have a voice in the decision-making process. This leads to more informed decisions and a shared understanding of the chosen path.

By embracing these principles, businesses can move towards what we call “AHA” decision-making: Accurate, Holistic, and Agile. This means ensuring your data and analysis are accurate and reliable, while also considering all relevant perspectives and information sources. Crucially, it requires the ability to adapt quickly to new insights and changing market conditions.

This approach aligns with Wharton’s professors Bart de Langhe and Stefano Puntoni, who challenge the notion that businesses should be purely data-driven, where decisions are dictated solely by the numbers. Instead, they advocate for a more balanced approach where data informs and guides human judgment, allowing for flexibility and intuition in the decision-making process.

In today’s rapidly changing market, this agility is crucial. Businesses need to be able to adapt quickly to new information, emerging trends, and unexpected disruptions. By fostering a culture of data-informed decision-making, businesses can navigate uncertainty with greater confidence and position themselves for success.

Businesses can navigate uncertainty with greater confidence and position themselves for success.

A case in point: Navigating a complex market with “wargaming”

A powerful example of this approach is a project with a plant-based nutrition company looking to enter a new market segment. The information existed in disparate sources, making it difficult to form a complete picture. To help them, we employed a “wargaming” approach. This involved gathering all relevant stakeholders and creating a simulated market environment. We presented them with various scenarios, challenging them to make strategic decisions based on the available information.

This exercise fostered a shared understanding of the market and its potential challenges and opportunities, while also helping the company make sense of the vast information available. By working through scenarios collaboratively, they developed a robust go-to-market strategy.

Beyond such structured exercises, technology is also playing an increasingly important role in helping businesses make sense of their data. AI is transforming how businesses collect, analyze, and interpret information. While some fear AI will replace human judgment, we believe it’s a tool that can enhance decision-making.

AI can sift through vast quantities of data, identifying patterns and generating insights but the future of effective decision-making lies in a partnership between human intelligence and AI.

Effective decision-making lies in a partnership between human intelligence and AI

Turning information into action: A call to leaders

For business leaders looking to turn information into action, we offer these takeaways:

  • Embrace a “decision-led” approach: Start with clear business objectives and hypotheses, then identify the information needed to support or refute them.
  • Foster collaboration: Break down silos and encourage cross-departmental communication to ensure all perspectives are considered.
  • Don’t be afraid to seek external expertise: Partner with experts who can help you navigate the complexities of data analysis and decision-making, and provide objective guidance.

In today’s fast-paced world, information can unlock a competitive advantage. At SKIM, we help companies to mine this information more effectively, providing greater certainty to elevate their pricing, brand communication and innovation strategies.

If you’d like to explore how data-informed decision-making can transform your brand, we invite you to reach out for a conversation.

Arne Maas

Written by

Arne Maas

Arne Maas is a business consultant at SKIM. He’s worked in the fields of strategy, innovation, communications, and market research for leading companies including Unilever, Friesland Nutrition, Philips, and Heineken. Arne has also served as professor of marketing and innovation at the Rotterdam Business School, specializing in nonconscious decision making and innovative entrepreneurship. Arne holds a PhD in Psychology from the Radboud University of Nijmegen.

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Jerome Hancock

Jerome Hancock

Jerome Hancock is a Senior Director at SKIM, leading the European Methodology and Analytics team. He has worked in marketing analytics for over 15 years, using predictive models to help clients optimize their marketing activities. He has consulted across a range of industries including CPG, Travel and Tech, using statistical methodologies such as conjoint, segmentation, key drivers, marketing mix and forecasting. He holds a Business degree from Nottingham and an MBA from Henley Business School.

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