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Smart Business Strategy Doesn’t Always Require Data

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Data & SpreadsheetsYour company may be really great at telling stories, but do you qualify as a storydoer?

A few weeks ago, I came across this idea of companies who are more than just storytellers. They’re also storydoers. Tyler Montague, the source of this idea, outlined six characteristics of a storydoing company:

  1. They have a story
  2. The story is about a larger ambition to make the world or people’s lives better
  3. The story is understood and cared about by senior leadership outside of marketing
  4. That story is being used to drive tangible action throughout the company: product development, HR policies, compensation, etc.
  5. These actions add back up to a cohesive whole
  6. Customers and partners are motivated to engage with the story and are actively using it to advance their own stories

Tyler and his partners went looking for hard statistical evidence to back up their contention that great companies are storydoers. It looks like they’re on their way to confirming numbers that support the theory. The question I want you to consider is why would you need numbers to justify anything on Tyler’s list?

All six items are strategies that could benefit any company. And yet Tyler went after hard data so he could convince people that the idea of storydoing led to business results worth pursuing.

There’s no question we have more data than ever before, and some of it is incredibly useful. So what comes next may sound sacrilegious to data devotees. We don’t always need reams of data to determine if something is good for business.

Tyler’s storydoing example is just one of many sound business strategies that gets more attention if there’s data to support it. But while we’re busy combing through the data, what are we missing? Have we missed an opportunity to make our businesses better because we needed numbers to make us feel comfortable?

I’m not recommending that we go back to ignoring data or only trusting our gut. I do recommend not letting a lack of data blind us to smart business strategy. Sometimes when you’re an entrepreneur it’s the only option available. You often don’t have enough data so say that one decisions clearly tops another.

I suspect that our love affair with data is tied to something that keeps most entrepreneurs and even seasoned business owners awake at night: the fear of failure. Data can make us better informed about some decisions, but it can also create an illusion that we’re making a decision without risk. Data may tell us more, but that doesn’t necessarily mean we’ve got the meaning right.

So the next time you see a strategy like Tyler’s to be a storydoing company, put it in context. If there’s numbers, pull up a spreadsheet and have a party. But if there’s not, use the skills and talent that got you into business in the first place and ask a simple question: does it have the potential to make my business better tomorrow than it is today?

The Entrepreneur’s Trap: Doing One Thing Well

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7155680446_b019e8b3a4_zWhen you start a business, one of the oft-heard admonitions is to avoid trying to be all things to all people. It’s the classic jack-of-all-trades, master-of-none philosophy.

On the surface, it makes perfect sense. Identify your niche and the very specific way you can offer a service or product to improve your odds of succeeding. However, what happens when you fall into the trap of doing one thing so well that it blinds you to what’s happening around you?

This blind spot came to mind when I saw a recent list of brands that no longer exist. Lehman Brothers, Washington Mutual, and Wachovia were obviously casualties of the financial crisis. But the one that caught my eye was the disappearance of Saab.

Saab had a niche and delivered a very specific product. But Saab made a mistake. It picked a niche that didn’t give it much flexibility or room for growth. So despite managing to do one thing really well for many years, Saab went bankrupt December 19, 2011.

In a report reviewing the demise of Saab, authors Matthias Holweg and Nick Oliver highlighted how Saab feel into the trap of relying on doing one thing well. But that one thing proved to have an expiration date:

Taking a wider perspective, the fundamental economics of the modern automotive industry simply can no longer support individualistic designs at the prices that Saab was able to command. Low volume producers can survive when their customers are ones with very deep pockets. If their customers don’t have deep pockets then they at least need to be plentiful in number. Sadly, Saab’s customers were neither.

Whether it was planned or not, Saab’s strategy placed it in the middle of the road, another aspect that doing one thing well can blind us to. We tell ourselves that because we focused on one thing we aren’t hedging our bets, but the entrepreneur’s trap opens wide if we’ve picked one thing that doesn’t inspire much emotion one way or the other.

For instance, one of the reasons restaurants like In-N-Out, Five Guys, and Shake Shack have made us willing to pony up $5+ for a burger is they’ve changed our expectations of a fast-food burger. We want this different experience. It’s such a clear step up from the McDonald’s, Wendy’s, and Burger King experience that it stands out. Even more interesting, if you take a look at their menus, the available options are fewer than what you see going through the standard drive-thru.

Now, they can get away with this strategy of offering fewer options at a higher cost, but only so long as they continue to deliver food that excels AND customers are willing to pay more for that experience. They’ve picked a side, they’re doing one thing well, and for now they’re avoiding the trap. In the coming years we’ll have to see how or if these companies can adapt if we move on from our love affair with expensive burgers.

So as you assess your options consider these questions:

  1. Does my one thing give me room to grow?
  2. What triggers can I add to help me see what’s happening around me even as I’m succeeding?
  3. If the one thing I do well stops being needed, how could I transition to something else?

To be clear, doing one thing well isn’t the primary problem you face. Instead it’s assuming that doing one thing well is all the strategy you need to succeed as an entrepreneur.

Photo credit: Vilseskogen