It is very common to hear people say “I’m no good at maths” as an excuse not to engage with spreadsheets and other analytical tools. However, numbers can tell you a lot of things about your business and where the opportunities for growth lie. The good news is that a basic understanding of maths, and a willingness not to shy away from asking questions, is all that’s needed to get real benefits from looking at your figures.
You shouldn’t be afraid of diving into a spreadsheet and reaping the benefits you can get from taking the plunge. But if you are a little scared, then fear not, this is the type of analysis that I use to give my clients a better understanding of their markets and where the opportunities might lie.
WHY LOOK AT THE NUMBERS?
When it comes to analysing financial and performance figures, there is an unspoken assumption that it’s going to be too complicated. As a result, people are often scared of making a mistake. And let’s face it, there’s always something more interesting to do.
Fear of numbers is, however, misguided and the benefits of getting to grips with them far outweighs the challenges involved. You don’t have to be a graduate - just basic maths knowledge and an inquisitive mind will be enough to help you use numbers to:
Build leadership capabilities
Increase market share
Improve business performance
WHERE SHOULD YOU START?
Start with your Profit & Loss Account, but don’t stop there. Look into your Customer Relationship Manager database and your web analytics information too, as well as your company’s industry related stats.
You’re looking for nuggets of information that will spark questions and lead you down paths of investigation. These investigations will give you market, team, product and proposition insight.
HOW TO EXPLOIT THE NUMBERS
Think of understanding the numbers as gaining knowledge about your business and using it to inform where you’re going next. Exploit and use your knowledge to:
Improve your products
Improve your service design
Identify market trends to get you there before your competitors
See how you are doing relative to the competition
Increase customer satisfaction
Improve staff productivity
Waste less time on wasted activities, and focus more on the things that are going to make a difference
I work with clients to help them interpret the information they have on a wide range of issues such as market share, audience profiles, geo targeting and more . This helps them to highlight where they should prioritise marketing and where they should look at developing new products or services. This type of analysis is invaluable for the efficient deployment of resources. It also stops them from going down avenues that simply won’t work.
HOW TO GET YOUR TEAM ENGAGED
To make the most of your figures, it pays to develop an organisational culture around knowledge, encouraging your teams to question and understand the numbers that come out of your business. This will help take away the secrecy and fear, making the process more open and engaging.
Overall, when someone says “I’m not good with numbers” you need to encourage them to look, to question and to plan how best to use the information before them. Culturally you need to lead by example and remove the barriers to asking questions and getting involved.
It is not uncommon to have ‘Champions’ in the workplace – ‘Customer Champions’ or ‘Workplace Champions’. So why not think about appointing ‘Numbers Champions’ too? Bring the discussion into everyone’s daily routine. Make it cool and get everyone involved.
The Real Life Example
Have you seen the film The Founder, covering the rise of McDonalds? There is a turning point in the film which, although it is slightly inaccurate in terms of who was involved, highlights a true turning point in the fortune of the company.
After rapid expansion McDonalds was suffering from overstretching itself and was finding it hard to keep control of its operating model. Turnover was high, store expansions were rapid, but operating costs where skyrocketing and threatened to bring the business down.
Understanding where the money was going helped the company make a change. It stopped serving milk-based shakes and replaced them with powdered shakes.
The outcome: costs were saved on pricey refrigeration, allowing for a healthier balance sheet and fuelling the growth of McDonalds into the business we know today.
MAKING INFORMED DECISIONS
Understanding the numbers will help you make informed decisions based on your customer and their needs, balanced against your operating costs.
Another Real Life Example
Blockbuster, the video rentals store, didn’t keep up with changing viewing habits. At its peak in November 2004 the company employed over 84,000 people worldwide. But in subsequent years it stuck to its store model and didn’t take Netflix, with its mail order service, seriously.
Blockbuster didn’t understand its customers and their changing needs, and it didn’t register the warning signs. Netflix however strode ahead, leading change, initially with mail order and then with streaming. Netflix was the firm who evolved when Blockbuster weren’t keeping an eye on market trends and market share.
What Blockbuster didn’t do, but Netflix did, was look at the figures. Netflix used them to:
Understand its customers and their needs
Look for profit and warning signs
Test and learn
Implement change and evolve
Numbers shouldn’t be scary. Instead, they should be part of the everyday language of your company. They are there to help you prioritise, understand, learn, adapt, evolve and grow.
I am always happy to talk numbers, so if you need some support, guidance or just a chat then get in touch.