You certainly wouldn’t need to convince Nate Silver that statistics can play a huge role in improving your business. Silver, of course, is the statistics blogger famous for his election prediction models. He has managed to build an entire company around the concept of statistics. This is in large part because public interest in statistics and data analytics is increasing every day.
There are many compelling reasons we should understand statistics: They play a huge role in our day-to-day lives, and they can be instrumental in how we live, work, and play. Accordingly, business owners need to understand some of the critical ways that statistics can help them run a better business.
Understanding averages and probabilities
Statistics can help inform us of all the various intricate parts of our businesses. They are not only useful in balance sheets and profit/loss statements, but they can also help us figure out how to use different business operations as effectively as possible.
Before you develop a statistics strategy for your business, make sure that you have a solid understanding of the basic terms. For example, it’s important to understand terms like average, median, and mode. These are the building blocks on which you can begin to use statistics productively.
Evaluating performance metrics
How can different employees contribute to your business’s bottom line? Are some people “pulling their weight” more than others? Such situations can be difficult to prove without the concrete evidence statistics can provide.
Using statistics to measure performance metrics can help you better understand if you are employing the right people. You can also check things such as how effectively certain business plans are working. Often it takes this kind of certainty to know if you need to change your business processes.
Is your hiring process working?
It can be helpful to evaluate how your onboarding statistics are working. Statistics can also help you determine whether your competition is making mistakes in their procedures, which can enable you to capture more market share. And as every successful business owner knows, increasing market share is the key to growth.
Where to make cuts
Finally, statistics can help you figure out if, and where, you might need to make cuts. Cutbacks are never easy, but they are a natural part of the business cycle so it is important to handle them responsibly. Statistics make this easier.
Consider these factors as you create a strategy to incorporate statistics into your business plan.
For more insight on digital transformation, see Outcomes That Drive The Intelligent Enterprise.