What information are you using to make the most important decisions about your business?

If you’re like most organizations, it’s likely you’ll be using a lot of internal data, i.e. information about your financials, your customers, your operations, and your people. Maybe you use software that helps you access this information quickly and easily.

Alongside this internal data, you’ll be accessing external data in a less formal and structured way; using your business network and media sources to stay up to date and informed about factors with the potential to impact your business – new competitors, new technologies, new government legislation and so on.

It’s highly likely that once a year, you’ll gather up as much information as you can (given limited time and resources) in order to take your organisation through a strategic planning process.

Watch Where You’re Going!

To us, this is akin to driving a car, spending most of your time looking at its dashboard (speed, revs, temp, fuel, etc) and hardly ever looking out of the windows to see whether you’re going in the right direction; whether you’re going at the right speed; and most importantly, whether there’s a danger you’re going to hit something ahead.

No wonder there’s so much inefficiency and stagnation in business today.

We believe all businesses can tap into the strategically useful external data that’s easily and freely available online. This is demographic, socioeconomic and even scientific research information that just about any industry can use. It’s collated and distributed by organizations such as the Australian Bureau of Statistics (ABS), the UK Office of National Statistics (ONS), the UK Met Office and the US government website data.gov and others. Each offers excellent and wide-ranging sources of up to date facts, figures and statistics that businesses can use to make better strategic decisions related to current and forecasted demand for their products and services.

Harnessing and exploiting external data allows businesses to delve deeper into the stories within. Let’s see how just one particular type of data can be put to good use. If you were a residential homebuilder in Western Australia, wouldn’t you like to know about the size (value) of the market? Whether it’s increasing or decreasing - and where you’re at in the cycle:

WA Value of Residential Building Work Done - New HousesWA Value of Residential Building Work Done - New Houses

Here’s another example using this same residential homebuilder. Wouldn’t you like to know your market share (by dividing your revenues by the size of the market), and over time to see whether your gaining market share or losing, to benchmark your sales performance? More than that, wouldn’t you like a good indicator of what the size of the market will be in the future? Housing Approvals are a lead indicator of housing construction activity by about 6-9 months:

WA New Housing Building ApprovalsWA New Housing Building Approvals

This information is very useful for both benchmarking your performance and for enabling you to make informed decisions about the allocation of resources – which markets to move into or invest more in, and which markets to exit or invest less in.

External data sources must form part of the bedrock of your strategy – how else are you going to be the company that moves swiftly and decisively to identify and capitalize on new or unmet areas of demand or opportunities for growth? How else will you move quickly to avoid, circumvent or recover from disruptive or potentially disruptive events? In short, successful strategic decision-making doesn’t happen in a silo, nor does it happen using only the internal data that companies have access to.

For an agile strategy you must ensure your organization has access to and can effectively use all the information available.

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