5-Steps to gaining real value from data


Business leaders are hit with a constant barrage of statements regarding the value of their data.  Catchy phrases like big data, machine learning, and artificial intelligence are thrown around as if they are some type of miracle cure for businesses, but the topic of how data can be used for real tangible impact is rarely covered.

Let’s investigate how data can help small and midsized businesses move the needle in a real and tangible way.  This is not meant to downplay the value of big data, machine learning, and artificial intelligence; rather, I am writing this for businesses that have less than a million customers.

I say less than a million customers, but in reality, this process will work for businesses of any size.  Frankly, many enormous businesses have a ton of data and have no clue how to monetize it.

The five-step process is:

1.       Get Context

2.       Identify the gap

3.       Measure the right things

4.       Improve

5.       Sustain the gain and repeat

Get Context

Any business, no matter how complex, is a system of processes within processes.  This understanding is valuable because processes can be measured, optimized, and improved.  Start by understanding your business as a process. 

Any business can be simplified to a three-step process:

1.       Receive investment from ownership

2.       Provide a product or service to the customer

3.       Return profits to ownership

Context is derived from continuing to break down the processes between the steps until you’ve arrived at something tangible.  We’ll break down the processes between “Receive investment from ownership” and “Provide a product or service to the customer.”

1.       Receive investment from ownership

   a.       Market product or service

   b.      Convert leads into sales

   c.       Send sales orders to operations

2.       Provide a product or service to the customer

3.       Return profits to ownership

Continue breaking down the processes between the sub steps until you’ve gained context.

1.       Receive investment from ownership

   a.       Market product or service

      i.      Identify target market

      ii.      Create targeted copy

      iii.      Run ads in specific channels

      iv.      Receive inquiries for products or services

   b.      Convert leads into sales

   c.       Send sales orders to operations

2.       Provide a product or service to the customer

3.       Return profits to ownership

You can repeat these steps until you’re comfortable with how well you understand your business as a whole.  You’ll be surprised at how much waste you can identify as you get into the weeds.

Identify the Gap

Every business owner or executive I’ve ever interacted with knows a gap between where they are today and where they want to be.  It is beneficial to formalize the wording of that gap.  Make a goal and make it “SMART.”   For more on SMART goals visit “The DMAIC Manifesto – Define Phase.”

·         Specific: Define who is involved, what should be accomplished, where it will be done, why you are doing it, and which requirements do you have.

·         Measurable: Will you have a method to know where you are today and in the future?

·         Actionable: Is the goal within your ability to control?

·          Relevant: Is the goal aligned with your Why?

·         Time Limited: Set a specific date that the goal MUST be accomplished by.

In keeping with our marketing example let’s say our goal is to: “Double our count of qualified leads, from 10,000 to 20,000, by 6/20/2019.”

Measure the right things

Measurement can quickly become costly.  Advice often amounts to “measure everything and store it in a database.”  This is rarely the right advice.  Often a simple spreadsheet or pen and paper will be sufficient.  Just because it isn’t in a computer doesn’t mean it is data.  In fact, many of the best statistical breakthroughs were developed before the age of computers.

So how do you know what to measure?  We need to return to our process to understand that.  Our SMART goal will require us to measure our count of qualified leads.  This is something you may or may not already be capturing.  In continuous improvement terminology, this is known as an output metric.

All processes can be defined in terms of output metrics and input metrics.  Think of this like an assembly line.  You put sheet metal into a machine (input metric), apply pressure (input metric), and produce a truck part (output metric).

Think through the inputs for your goal.  The process context exercise from earlier can be a huge help here.  For our SMART goal, we identified inputs like our target market, our ad copy and the marketing channels we want to use. 

Keep a record of the inputs and the result you realized from each.  We’ll use them in the next step.


Now we’re ready to reap real benefits from our data.  We know how our process is aligned with our business, we have established a smart goal, and we’ve started gathering the data that we need.  Now we’ll start gaining traction through hypothesis testing. 

Hypothesis testing can sound daunting, but I assure you that you’re already doing this daily in your business and your life even if you don’t realize it.  In simple terms hypothesis testing is creating a theory and testing the impact.  For example:


I love BBQ brisket (check out “Of BBQ and Continuous Improvement” for more), but don’t care for it when it is tough.  So when smoking a brisket I’ll try different temperatures, times, and woods.  I’ll then note which is best to me.  Perfection for me is achieved by smoking a brisket at 225 degrees Fahrenheit for up to 18 hours (or an internal temperature of 200 degrees) using PECAN wood as a heat source.  I, of course, have other inputs such as my super-secret rub, but I won’t give away the whole recipe. 

To produce this heavenly brisket I’ve tried many different combinations.  I’ve tried higher and lower temperatures, and I’ve tried different woods like oak, maple, peach, hickory, etc.  I recorded these inputs and my resulting happiness using pen and paper.

We can do the same with our marketing example.  Measure the different combinations to find what works best!  It’s really that simple.  Do this and invite your friends over for some awesome brisket.  You’ll amaze them by saying, “I perfected my marketing and this brisket by testing competing hypothesis until we found the best possible combination of inputs and outputs.”

Sustain the Gain and Repeat

Now that your process is optimized it’s time to make sure that your gains are sustained.  Keep a record of what worked and what did not work.  You’ll find that there is always room for improvement.  As Vince Lombardi said, “Perfection is not attainable, but if we chase perfection we can catch excellence.” 

The position you’ve reached is your new baseline.  You don’t want to slip backward.  Moreover, you can use what you learned to double your qualified leads again from 20,000 to 40,000.

You now have a process to follow that will allow you to get real tangible results from your data.  This use of data is the essence of continuous improvement.  It is based on using data to drive real-world results.  It does so in a manner that extinguishes uncertainty.  You know that you are improving and WHY you’re improving.  That is very powerful in business.

I would love to speak with you about how using data with continuous improvement could benefit the owners, employees, and customers in your company.  Send me an e-mail at Attila@Dobai.com or visit Dobai.com to connect.