What do you consider when planning for the future: trends, intuition, trial and error, data, or the opposite or advanced version of competitors’ decision(s)?
You may have made decisions – both crucial and minor – using any, some, or all of the above options that later proved to be successful. And maybe because of the wonderful results, you swear by a particular approach and rarely consider alternatives. This article seeks to challenge you.
With Covid-19 snowballing, squashing our hopes of going back to ‘normal’, and putting businesses on survival, rather than thriving mode, there is need for extra caution on how you make business decisions to avoid losses. This is where predictive analytics come in. These are metrics that indicate what happened in the past and can be used to predict and prepare for the future. They indicate what was done in the past, the manner, the approach, and the results.
In spite of the massive success that many businesses have had upon using predictive analytics, some hesitate and are doubtful for some understandable reasons.
Why some business leaders avoid using predictive analytics
a. Minimal emphasis
The use of data to understand the past and plan for the future has not received a lot of attention. Although some organizations have been using it for a while and had great success, the idea is not yet as popularized. As a result, some business leaders become doubtful of its value.
b. Notion that the past ought to be forgotten and future is totally out of control
The notion that the past should be buried and forgotten has been popularized in various fields and contexts. In some contexts, that should be the case lest one is entangled in a cycle of suffering. Sadly, this idea of the past deserving absolute abandonment has been transferred in some corporate settings and little to no opposition posed to it. This has caused some serious problems.
Business leaders who disregard the past – often the unglamorous type- with assumption that nothing worthwhile can be reaped from it are at risk of repeating some mistakes or veering off from the primary objective of the organization unconsciously. Some of these unfortunate circumstances remain unknown until they have manifested fully and caused a lot of damage. Where reports of analytics exist, they are dubbed useless and pushed aside and where they don’t, no efforts are made of coming up with them.
No matter how convincing the assumptions or how understandable the stance may be, past occurrences in corporate settings are an asset if used properly. The future, though elusive, can be planned for.
c. The challenge to look inwards
Predictive analytics require extensive reflection and this act, though necessary, is massively avoided. It requires one to confront himself and in the process, elicits an uncomfortable feeling because there is a high possibility of discovering decisions and actions that do not reflect one’s full capacity.
Importance of predictive analytics
a. Data shows the actual picture.
Are your employees busy or productive? Are they exposing you to risks with their on-duty or off-duty habits? Which products or services appeal to customers the most and the least? What drives them to make some decisions? Which customers are likely to leave for competitors and which ones are likely to come to your side? How can you know whether the newly adopted ideas have a future?
These are some of the questions that you cannot answer accurately without data. Data reveals the actual nature of operations so you can see the difference between your current position and the desired.
b. They are decision-making support tools
Which direction do you wish to steer your organization? What, when, and how should you improve?
The future remains unpredictable. However, by assessing historical data, one can make a close estimate of where the organization is heading and make the appropriate adjustments. Data gives hints of what can and should be adjusted, postponed, or eliminated entirely for better results. That way, your company will not be at the mercy of circumstances and will instead have control. In addition, using background data minimizes the time spent on making decisions.
c. Risk management and aversion
More often than not, there are routines in how some activities are carried out in organizations. But without an assessment of the results from each action, there is a risk of falling on dangerous paths. There is no risk-free path in the business world, but some pose more danger than others; a fact that can remain unknown if data is not assessed. Data shows weak areas; the information can help business leaders take the appropriate corrective and preventive measures.
d. Gain a competitive edge
Customers’ needs are constantly evolving. Those who can detect the changes in their infancy and adjust their approach to meet them get the biggest market share. Data shows these dynamics and can guide you to adjust your approach for consumer satisfaction.
Data, when properly analyzed and examined, helps in understanding the world. It shows the correlation amongst factors and as a result, gives business leaders a hint of where the world is headed. Therefore, if you haven’t considered this approach, it is time.