I am reading a book called The Invisible Gorilla by Christopher Chabris and Daniel Simons on attention, perception, memory and reasoning – which comes to this startling conclusion: “Our minds don’t work the way we think they do”. One classic experiment they did shows that 50% of us at any time will miss critical information, even when it is right in front of us. If you want to do a quick test on how well you do, watch this 1.5 minute video and see. I won’t say any more about it because I don’t want to spoil it!
The main concept is that we often see what we expect to see and we also create connections that lead to erroneous perceptions. What does this have to do with being a business owner? Well, everything. When a business is first starting out, the number of data points in the business is usually quite small and the business owner can process the data and create useful information to guide the company. However, as the company gets more complex, this internal processing of data starts to go awry and the owner’s expectations and perceptions don’t match reality. Often in these instances, the business owner gets caught in a reactive ping pong of how the company is doing. A large check comes in and the bank account is flush – doing great, time to expand! A customer leaves or a big batch of bills is paid, depleting cash – oh, no! The sky is falling!
The way out of this situation is actually quite simple. First, make sure your data is correct, well organized and THIS IS VERY IMPORTANT connected to each other in the best way to produce useful information Also, look at the same data in the same way at the same time in your business cycle so you are comparing apples to apples. In business, it’s all about the flow of accurate information that you know you can rely on.
See below for some more tips for managing your business data….