Brass Tacks: Unnecessary data dumps can be a corporate distraction

Q. It’s a safe bet that my company now manufactures more numbers than it does gaskets. The statistical and financial reports that I receive are, at best, mind-numbing and, at worst, confusing and misleading. How can I stem the tide?

A. Modern computer technology has made possible the mass – nay, MEGA – production of data. Contemporary managers seem to feel that if they aren’t receiving a full measure of “numbers,” they are being left out of an important loop. Moreover, many are convinced that if they are not contributing their fair share of data, they risk being judged “less than optimally productive.”

As a consequence, decision-makers are being smothered by data, most of which is irrelevant to their primary responsibilities and a lot of which is distracting in its ubiquity and time-consuming in its consideration.

Bottom line: You – and most other managers – are receiving too many numbers that can be harmful to your corporate health.

How can you stop the amoeba-like proliferation of unnecessary operational and financial data without jeopardizing the flow of need-to-know stuff that you and the managers of your firm require to function efficiently?

Your first step is to determine which “key numbers” you must obtain routinely to readily ascertain the status and direction of your firm. (The nature of these “key numbers” was examined in an earlier article, which I would be happy to e-mail to you upon request.)

Second, make sure you have the tools and systems in place that will enable you or your managers to secure specific data on request. Those folks who formulate strategies and tactics forge decisions and mount responses to challenges and opportunities need accurate, relevant and up-to-date information. Your firm’s IT, accounting, marketing and operational systems must be able to furnish this “applied data” on request.

While most of us would agree that this kind of “on call” data should not flow continuously and autonomously in unrequested reports, the fact of the matter is that most firms lack requisite “numbers police” to keep such a surge in check. You and your managers must take deliberate, forceful action to staunch the flow of data in your firm before it reaches debilitating, tidal-surge proportions.

To begin, collect 30 days worth of the daily, weekly or monthly reports that stream across your desk. Determine which reports, in their entirety, reflect obvious irrelevance. Locate the originator of that report and jointly decide whether it can be summarily terminated.

The next step is more difficult. You, or a number-cruncher you designate, must review each report and subject each number displayed to the litany of interrogatives provided below. Busy folks often try to beg off this assignment, claiming it will take too much time and effort to look critically at every number in every report. (If this is true, what’s the darn data dump being generated for in the first place?)

Nevertheless, these queries will help you separate the valuable numerical “wheat” from the useless “chaff”:

• What is the source of this number?
• Who originates it?
• How is this number compiled or sourced?
• How frequently is it prepared?
• Who distributes it?
• Why am I getting it?
• What does this number reveal?
• What new insight does it provide?
• What status or conditions does it reflect?
• What action does it invite?
• What other numbers does it relate to?
• Are the insights provided by this number offered by any other numbers that are readily available?
• Who else receives this number? Do they use it? What does it tell them? To what end do they use it?
• How does knowing this number affect their actions or performance? How often do they need it?
• If this number were not routinely available, who would feel deprived? What activity would be affected? How?
• What would be the impact of less frequent availability?
• Can this number be secured on a “request only” basis? If so, who do I see about stopping its automatic distribution?

Once you’ve identified the useless numbers and the reports that contain them, appoint a “firing” squad to torch the batch of reports currently clogging your in basket and empower it to take immediate steps to deter the continuing production of more.

Once you are familiar with the nature, origin and practical application of the numbers your firm really needs to function effectively, approve those for periodic circulation. Then formulate a policy with respect to the sanctioning of new routine reports in the future. You’ll probably have to appoint a “data dictator” to enforce it.

Remember, only quality numbers count.

Paul Willax is a professor of entrepreneurship and chairman of the Center for Business Ownership Inc., Amherst, N.Y. He also is the author of the book, “Brass Tacks Tips for Business Owners,” available at barnesandnoble.com. If you have a question or suggestion for his column, or to receive a free, weekly e-mail newsletter, “Brass Tacks BrainFood,” write to Willax@TheBrassTacks.com.