The Art of Letting Data Inform, Not Dictate, Decisions
For decades, data-driven decision making has been strived for and praised for its objectivity. Recently, though, we’re seeing a shift from data-driven to data-informed. The main distinction is that data should inform decisions, but not dictate them.
As the world changes at an exponentially more rapid pace with technology, data alone is no longer sufficient to make company decisions that will impact future success and longevity. Data is still important and should still be taken into consideration for company decisions, but it’s not the “end-all, be-all” it once was seen as.
Context is Key
Looking at the numbers alone leaves out tons of important information. Is this just a short-term dip or a more persistent issue? Did something go wrong that could’ve caused this, but has since been fixed? What other external factors are at play that could be influencing the numbers?
Without context, data could lead organizations to make shortsighted decisions and miss potentially significant opportunities. Qualitative information can be just as important as quantitative when making decisions about future strategies. The numbers tell the story of what happened, but it’s up to financial leaders to figure out why, how, what will happen next, and how to best prepare.
Listen to the People
Particularly in the senior living industry, where care is at the center of everything, listening to what your residents and their families have to say is crucial. If the numbers say you should cut a program, but the small group of residents who participate say it’s the highlight of their week, you may want to think twice about getting rid of it.
Cutting something the numbers tell you to cut may defeat the purpose if the program is enough of a draw for enough people. Sometimes things that seem unimportant from a data standpoint are the most important from a human perspective.
Look Ahead, not Just Behind
Data is, by nature, about what has already happened. Many organizations across industries operate under the assumption that what has worked in the past will work again in the future.
That’s not always the case. With technology advancements and an ever-changing society, operating solely off of what has worked in the past can be like moving through the world with blinders on. Look beyond the data to see what’s happening outside the numbers and if there are any opportunities for you to position yourself for the future instead of just keeping up.
Data is still crucial for decision making and future planning, but it should be the starting point where financial leaders apply their knowledge and experience to come to a conclusion, not the decision itself. If your organization is in need of financial guidance so you can move past data-driven decisions to data-informed decisions, get in touch with KSH Consulting to learn about how our experienced financial experts can help.
