The honeymoon (if you could call it that) of adjusting to the new normal is over.
There remains more unanswered questions about the impact of COVID-19 on both lives and economic livelihoods, and it is likely to remain this way for a long road ahead.
We’re not health care professionals, so not in a position to comment on health matters.
But as both a start-up and as an organisation whose technology didn’t exist five years ago, nor during the last global downturn (the 2007-08 Financial Crisis), it’s in our DNA to constantly navigate disruption and care about the economic health of organisations.
But embracing disruption cannot be said of most organisations. It’s counterintuitive to embrace it.
It’s disruption after all.
This means that within the one team all working together, you may see:
- some loving the new direction and challenges presented (“We’re in a position to thrive if we pivot!”)
- others waiting patiently for the uncertainty to be over (“It’s just a bump to this quarter’s earnings”)
- and others slamming on the breaks (“We’re doomed!”)
… and this is all within the same team in the same organisation.
So how can it be that a group of people, sure with the usual silos, but with the same financial plan, the same business model, the same access to real-time metrics and reports, that they see the same business situation, very differently?
Why is this the case?
The Pursuit of the Truth: Facts vs Opinions
Put simply, it boils down to how people process information.
Daily life and social media make it particularly troublesome that the difference between fact (something that is verifiably true) and opinion (something you think is or might be true) are muddled.
Donald Trump’s false claims for example, said with great conviction, are not merely troublesome. They are outright dangerous. Such crazy claims are a good example of being so extreme, that we hope many immediately question the plausibility, the evidence, the data source.
But in pursuit of the truth, the quest for insight to help us make better decisions - Should I cut resources or headcount? Should I invest more in sales or marketing? Should I stay married or get a divorce? - making sense of the information (facts vs. opinions) and recognising what key information is missing (vs. what’s in front of me) is not always clear.
In fact, it’s bloody hard work and particularly troublesome when data and opinion seem plausible on the surface (or in a shiny Powerpoint deck).
Hindsight or facts alone ≠ Insight.
Let us explain.
Are you operating on opinions, hindsight or insight?
Fact: Profit for your company in 2019 was $1 billion.
Opinion: We’re in a healthy position to thrive beyond the current uncertainty and a looming recession.
Let’s assume that the maths is correct. The numbers don’t lie. The company made $1 billion in profit last year.
But the fact alone, doesn’t tell us whether the result is good or bad, let alone stretch into the realm of having a recession proof strategy.
“I don’t get it. We’re profitable and that’s a great thing going into economic uncertainty.”
What’s missing here is context, lots of it. For example:
- Is it good or bad compared to last year? → it’s 40% less than last year
- Is it good or bad compared to 2 years ago? 5 years ago? 10 years ago? → it’s an accelerating downward trend
- What is our profit margin (the percentage of profit to sales)? Is this high or low? → it’s 10%
- Is this result good or bad compared to our competitors? → 10% (us) vs. 50% (them)
- Is it good or bad compared to other companies that survived in previous downturns (e.g. 2007-80 GFC, 9-11, 2000 dot-com bubble, 80s recession)? → oh boy, we’re toast….
The point here isn’t to hate on facts. Nor is to present (unsubstantiated) opinions with greater confidence (no thanks Donald Trump!).
The maths is always true, but by itself it’s not always insightful.
Facts alone ≠ Insights.
The goal is to make decisions with as much insight as possible, recognising that facts alone aren’t always insightful.
So how do you shift your organisation from a culture obsessed with facts alone to a culture of insights?
Read more in Part 2 of ‘How to cut the cost of insights, without cutting intelligence’ where we present a framework for how you can solve this very problem. We review the 5 most common sources of insight in organisations today - including SAP, Oracle, Tableau, Qlik, Power BI - and the role of BI and Insight teams and processes that prevent a culture of insights and enhanced decision making.
But for today, we wanted to focus on definitions - opinions vs. hindsight vs. insights - and why the time is now to get serious about insights. What might have been a nice-to-have or a privilege, is now a matter of business survival.
So, that’s our thoughts for today. Good luck in your businesses. Stay tuned for more on how to thrive with insights during these challenging and uncertain economic times.
CHECKLIST: Does your company largely operate on HINDSIGHT or INSIGHT?
To learn whether your organisation largely operates on hindsight or insight, here is a 5-point checklist to measure the pulse of your organisation.
Now this doesn’t sound too bad. A stable situation such as modest growth, is often the right time to keep doing what you’re doing.
But compare this to companies that don’t confuse hindsight with insight.
What does your organisation look like?
Hindsight, or facts alone without context ≠ Insights.