Show Data With A Meaningful Narrative

by Jay Deragon on 04/02/2012

A company introduces a new service and brings it to market at a reduced “buy now” price then two weeks later they increase the price . The executive then states ” Sales are down and we need to lower prices back to the introductory rate in order to  increase sales”. Will lowering prices increase sales?

Learning vs. Using Data

Leaders have used data to justify their decisions. New leaders will learn from the data to make better decisions.  Learning from data is a lot different than using data to fit your own narrative. Data creates its own narrative if viewed in context of rates of change and degrees of variation vs. single points of observation and/or averages without a correlation to cause & effect.

Conditions have changed to make leadership harder. Spencer Stuart’s Tom Neff, the dean of CEO Executive Search, puts it baldly: “We are experiencing a demand for new types of skills and sacrifices in C-level executives that many are not prepared to bring to the table.” Of course, the corollary is that great leadership capability has never been more valuable.

Even as the accessibility of information makes it less necessary for a group to have a leader to inform, organize, and mobilize its action, the sheer glut of information makes it more vital for a leader to show how all the data add up to a meaningful narrative—to interpret and inspire. If institutional reverence cannot be assumed, it is a bigger part of the leader’s work to engage hearts and minds. In an era when character is not a given, the leader who consistently displays integrity will have real impact. via Why Great Leaders Are in Short Supply – James S. Rosebush – Harvard Business Review.

Back to Interpreting The Data

Old leaders have been taught to add, subtract, multiple, divide and average data. Driven by a philosophy of managing by results whenever a signal point of data is used to manage by the results of the moment (weekly, monthly comparatives etc.) people react without understanding causes of variation in results. Leaders were never taught any context to cause and effect and even more importantly a meaningful narratives of wisdom that defines variations in data and special vs. common causes.

Putting data into context tells a different narrative. The opening story and graphic illustrates the “systemic behavior of sales” influenced by initial PR and marketing efforts. While the executive thought sales were down because the price went up the reality was sales did not go down when the price went up. The cause of lower sales than those achieved initially had nothing to do with price rather everything to do with marketing, or a lack thereof.

As the HBR article states: ” the sheer glut of information makes it more vital for a leader to show how all the data add up to a meaningful narrative—to interpret and inspire”. Data needs to be viewed systemically then inspiration can be achieved through wisdom.

{ 1 comment }

Jeffrey Barber April 2, 2012 at 10:24 am

The day I here an Owner or Executive Manager say we should lower the price I will fold up my tent and go into the widerness. In my 45 years of business experience I have never heard any of these type people say “lower the price”!

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