Data and the Art of Exploiting Headwinds
When volatile economic news dominates the headlines, business leaders often find themselves adopting a turtle-like defensive position. When faced with adversity, contraction is a natural response. Scenario planning and cash management take center stage.
But challenging market conditions also provide an opportunity to distance yourself from the rest of the pack. History shows that the market favors the brave. Companies that seize the opportunities of market disruptions historically outperform those that do not, whereas a purely contractionary response tends to produce median company performance. This research is balanced by the counter-observation that an exclusively expansionary approach can lead to catastrophic flops.
So there must be prudence and balance. While defensive actions are necessary at times, leaders who simultaneously adopt an opportunistic, offensive stance find themselves ahead when conditions stabilize. A hearty “Aaaarg!” in the face of the storm is not recklessness. It is strategy.
Courage Is Not Simply a Virtue. It Is a Business Requirement.
Accepting that venturing courage is required to thrive in both the ebbs and flows, a leader might ask: what does reasonable courage look like? McKinsey and Company has found that the best leaders and companies balance caution about downside risks with aggressive pursuit of upside opportunities. So why do most opt for shelter? Because when the line between prudence and pursuit is unclear, the safer choice wins. Data insights are the key to overcoming that non-choice between playing it safe and rolling the dice. Clarity around performance numbers and measurable risk enables leaders to be bold rather than reckless, to make decisions, commit, and execute.
For additional insight on executing through adversity, read our interview with Jill Belconis, who led Shelter Mortgage to an average of 20% growth annually even through a recession.
Data Creates a Tactical Advantage
As a data analytics consultancy, we have a front-row seat for watching how a deeper understanding of your data compared to your competitors creates tactical advantage. McKinsey poses a set of questions worth asking yourself honestly. Do you have full visibility into your supply chain, including third- and fourth-tier suppliers and your options for strengthening resilience through dual-sourcing and in-region manufacturing? Are you evaluating your portfolio at a granular enough level and fast enough pace to see region- or segment-specific headwinds and tailwinds that a higher-level view may obscure? How well do you understand your customers and end consumers, and can you detect changes in sentiment rapidly and continuously?
Do you have a mechanism to gather signals from across the organization, including geographic leaders and commercial FP&A, on a regular basis or in real time, and distill them quickly into options the organization can act on? Have you built digital and analytics capabilities across the enterprise that yield cutting-edge proprietary insight? And are your scenario analyses and risk identification sufficiently creative, or do you risk a failure of imagination about what could happen?
If you find yourself answering “no” to most of these questions, it may be the season to invest in business intelligence. BI provides real-time visibility into current signals so leaders can make proactive changes rather than reactive adjustments. The same pattern holds across economic cycles: the companies that use downturns to build data capability come out of them with a meaningful structural advantage. Start with quick-hitting dashboards that surface to your team the metrics most critical to moving forward while others wait out the storm.
If you are ready to build the data visibility that turns headwinds into advantage, Blue Margin’s managed data service can get you there quickly. Contact our team to get started.
