Analytics RARELY makes your business grow (unfortunately…)

Tom Breur

1 August 2016

Management loves charts that run from the left bottom to the right top. In fact, in business school they teach you to present your findings like that, because it helps you gain acceptance for whatever it is you are presenting. After all, what’s not to like about growth? Unfortunately, the reality is that most businesses operate in markets that are already completely, or almost entirely saturated. There simply is little genuine organic growth…

Does that mean that analytics doesn’t have a role to play? Or is it of less importance? No!!! In fact, I would argue that analytics is even more important in support of business objectives when you are competing in a saturated market, than it is for businesses that are (still) growing rapidly. The more turbulent the growth, the less management decisions will be affected by fine grained analysis. Under those circumstances it is more important to grab opportunities quickly, especially if these opportunities require minimal management attention. Time to market, acting fast and furious, are a higher priority than fine-tuning the offering.

In saturated markets, on the other hand, analysis can help pinpoint “new” opportunities, even if they are small niches that can be served better in some new way. No disruptive innovation, but small and gradual extensions of the existing value proposition. Less sexy, less impressive, but ever so important to “meet the numbers”, to adhere to historical growth numbers management (and shareholders!) have come to expect. If you can match the rate of population or GDP growth, at least you’re not falling behind.

When these advances are based on analytics, and leveraging proprietary (non-public) data, you may also reasonably expect this growth to last, at least for the foreseeable future. If you want to plan for revolutionary rather than evolutionary innovation, it typically needs to come from somewhere else. As I wrote before, the mainstream use of the word “prediction” really is about classifying the past (https://tombreur.wordpress.com/2016/07/15/predicting-is-hard/). As long as you are willing to assume that the future will be similar to the past (and take that risk…), you are safe.

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