How to Use This Book
The old cliché “What gets measured gets done” might have been accurate once, but in today’s data-driven, digital world it seems that everything is quantified, tracked, and recorded.
And to what end? Wasn’t having all that data at your fingertips supposed to make you better informed?
Wasn’t it supposed to make you more confident and more certain of your direction? The new cliché, it seems, is that you can’t be too thin, be too rich, or have too much information. Today, instead, it seems that everything is measured, and nothing gets done. In our information-driven global economy, the real challenge lies in keeping your head above the flood of data, learning how to separate information from facts, and acquiring the judgment to use what you find to inspire others to act.
This is especially true because most of the irrelevant information that washes across your desk, laptop, or smartphone doesn’t just fall from the sky—it’s generated by the company you work for. In other words, because managers don’t know what they’re looking for—that is, because they don’t focus on the one indispensable piece of information they need to move a project forward—they blame their confusion on the volume of data.
Yet even while waving the flag of surrender, most of them continue to ask for even more information. And as unproductive and contradictory as this habit clearly is, it’s reinforced every day. Why? Because we work in a business culture that worships numbers, whether or not the numbers mean anything. Just try showing up at a sales meeting with a two-page spreadsheet or a deck with only seven slides in it. Chances are they’ll throw you right out, then start com- plaining about your “level of rigour.”
Drinking from the Fire Hose was written to help break the habit of gathering and presenting too much information, and to give you the tools—that is, the seven Fire Hose Questions—to help others break the habit. People want answers. Just as a prism separates light into parts, the Seven Questions serve as a prism for the information streaming across your desk, thus creating a new spectrum of actionable infor- mation.
The reason is simple: The right questions expose outliers in the data, draw connections between seemingly unrelated conclusions, and open different avenues of discussion between your colleagues.
This book was written to help you avoid meaningless data, to help you find the information you need, and to help you gain new insights. And strangely enough, although the problem is extremely complex, the solution is relatively simple. From our firsthand experience at both Fortune 500 corporations and bootstrap start-ups, we’ve learned that the solution to the problem involves nothing more difficult than ask- ing the right questions at the right time.
That’s what this book is all about. Seven Questions. Seven straight- forward, immediately applicable, practical questions. Seven Questions that can be asked from the businessperson’s perspective or the custom- er’s. Seven Questions that used together provide a process for the most effective use of your company’s data. That process, or approach, is the key to accessing data already locked in your organisation and to finding answers that will drive your business forward. The core principle of this book, in fact, is that the person with the right questions shapes the discussion. And by asking those questions, he or she focuses the inquiry, makes better decisions, and helps others make better decisions.
What we’re saying is that this book isn’t about crunching numbers, or absorbing all the data coming out of the fire hose. It’s about keeping yourself from being swept out on the tide of information overload. But it’s also about doing more than just treading water and trying not to drown. It’s about giving you the tools to face the flood of information head-on. It’s about enabling you to quickly dismiss anything but the truly relevant information, about taking the time to think over the information you’ve gathered, and, as a result, about arriving at fresh insights. Once that’s happened, you’ll be able to make carefully thought-out, well-informed decisions—and you’ll do it in half the time you used to.
We must have considered hundreds of questions before settling on the short list that forms the backbone of this book. And although each ques- tion asks for a different set of facts, a common thread connects them all: the search for the one critical piece of information you need to move the project, or your business, forward. Toward that end, the questions are designed to let you know what the customer really wants, what the end user will buy, and how you’ll provide it. And once you’ve answered those questions, the Fire Hose approach will also enable your team to act.
If the data in front of you doesn’t help you answer at least one of these questions, get rid of it.
Useless data saps morale. Useful information is energizing. We all know what it’s like to sit through tedious, unproductive meetings. Meetings where no one ever asks a question—unless everyone already knows the answer. The Fire Hose Questions aren’t like that. They’re not like the questions you were asked in B-school. They’re the product of decades of combined business experience. They came from our un- derstanding that unless you’re sitting at the head of the table—or pretty close to it—it’s tough to speak up. From our knowing that it’s easier, and safer, just to sit there and nod your head as the slides go by like so many floats in a parade.
And knowing how much courage it takes to be the one person in the room who doesn’t just ignore the presentation and check e-mail on their phone, we worked hard to come up with questions you’ll feel comfortable asking a roomful of your peers—or senior management. Questions that can’t be ignored, by virtue of their obvious, thoughtful relevance.
And questions, by the way, to which you don’t need imme- diate answers, because their primary purpose is to make everyone in the room stop and think, and then to shift the conversation into a more fruitful direction. The answers will come in their own good time. In the meantime, we’re confident that you’ll quickly become comfortable asking these questions, because you’ll see that you’re doing everyone in the room a service—by refocusing the analysis, reevaluating the infor- mation it yields, and using it as a catalyst for action.
Learn to ask the right question at the right time, and whether or not you’re an expert on research, analysis, or business development, you’ll get to the right data—that is, the information you need to move things forward. Or, put another way, you’ll learn how to drink from the Fire Hose. Now, let’s take a quick look at the real world—that is the business world of today, without the Fire Hose Questions.
It’s late morning. You’re sitting in a conference room with no windows. The lights are low and the projector is humming. Eight of your colleagues are there with you at the meeting, including the head of marketing, the social-media manager, and a few business development folks. A few of them are checking their e-mail. Three other partici- pants have dialed in on the phone.
The meeting starts 10 minutes late. Two of the key people couldn’t make it and they sent delegates, neither of whom has a real understanding of the issues or the authority to make decisions. 20 minutes into the meeting, the presenter finally makes it to slide four of a 30-two-slide deck. At least you can read this one, unlike the first three, which were so crammed with numbers (Figure 1), graphs, and charts, all of them using different colours, that you couldn’t figure out what they meant.
You look around the room, wondering whether anyone else is actu- ally following the presentation. If they are, they must be smarter than you. You can’t figure this slide out, either. In fact, the moment it pops up, your head starts spinning.
Another slide appears (Figure 2). You can’t figure out what the headline has to do with the bar graphs below it. And although each one of them is divided into segments, you can’t tell why. The presenter reads every word and every number on the slide. He then veers off on a tangent, and two or three minutes go by before he comes back to the slide. From what you can see, there wasn’t much movement in the numbers, but when the presenter points to them as a “directional im- provement,” heads nod approvingly.
Another slide takes its place.
You start to raise a hand to ask for clarification, but then think twice about it.
No one else in the room has asked a single question, and the more you think about it, the more you think it’s not such a good idea.
Everyone else must get it, so what’s the point in letting them know that you don’t?
Besides, it might lead to a lengthy debate, with no obvious answer, and you’ve got work to do. Finally, someone calls for a “time check,” and you and the other five people left around the table scramble to identify as many action items as you can in a vain attempt to show that the meeting had some purpose. Someone suggests a follow-up meeting later in the week. You tap your phone to check your calendar: There are eleven new e-mails in your inbox, and you’ve missed two calls.
Another hour shot out of your workday, and for what? All the facts and figures just led to more ques- tions, not answers. In fact, you feel like you know less than when you got there, and the presenter wants to go through the same charade later in the week.
By now everyone recognises the problem, but few of us have figured out how to deal with it. What’s more, the symptoms of the disease make it even harder to treat. The facts and figures blind us—or, worse yet, they bury us. And even if you manage to stay on your feet as the Fire Hose whips back and forth, soaking everyone in sight, meaningful dialogue and critical thinking are impossible.
The promise of the information age, in other words, has given way to the reality of data overload. And every day, as the types of data expand, the frequency of data collection increases, and the total volume of data explodes, the stream becomes more powerful. Far from helping us make decisions, the water cannon of information pins us against the wall, creating more questions than it answers and leading to caution and uncertainty instead of well-informed, carefully considered business strategies.
Everywhere you look, the quantity of information in the world is soaring. According to one estimate, mankind created 150 exa- bytes (billion gigabytes) of data in 2005. This year, it will create 1,200 exabytes. Merely keeping up with this flood, and storing the bits that might be useful, is difficult enough. analysing it, to spot patterns and extract useful information, is harder still. Even so, the data deluge is already starting to transform business, government, science and everyday life . . . It has great potential for good—as long as consumers, companies and governments make the right choices about when to restrict the flow of data, and when to encourage it.
—”The Data Deluge,” The Economist, February 25, 2010
So we’re all overwhelmed by data. That we can agree on. But as the authors of this book, we want to make one thing clear: We’re not anti- data. In fact, we love numbers—sales volume, retail traffic, market trends, applications, subscriptions, renewals, news bits, reports, blogs, e-mails, articles, etc. That is, we love good information. Information that leads to answers. Information presented at just the right time in the decision-making process. To make this clear, we need to devote a few lines to talking about the difference between data, numbers, and information.
Data is facts. In a storm, drops of rain are the data. They fall end- lessly. They never stop falling. Like data in the business world, they rain down on everything and everyone. Many of those raindrops hit the ground and disappear; others collect in pools or flow together to form streams. But the data itself is meaningless. That is, it may or may not hold meaning. But even if it does, you won’t be able to get to it unless you learn how to tell one raindrop from another.
Numbers are results. They communicate change. They show speed and direction, much like a rain gauge shows accumulation. Those results come from the collection of specific data, data selected for a reason. Numbers may or may not be useful. But they’re not random. We think of them as filtered data.
Information is what you get when you analyse numbers. It involves the recognition of tendencies in certain collections of numbers. Infor- mation can prove or disprove statements. It can support or discourage plans. It can be acted upon.
But information isn’t the Holy Grail. Insight is. Insights allow us to see clearly into complex situations, and that’s the whole point. Data leads to numbers, numbers to information, and information to in- sights. Insights, finally, inspire action. Data is just a means to an end. But in our data-driven world, almost all of us seem to have lost sight of that.
The sheer volume of data isn’t the only thing that’s changed; today’s data no longer streams through the same channels it did at the turn of the 20-first century. In its August 17, 2010, online edition, for instance, Wired magazine (Figure 3) charted the expansion and contrac- tion of Internet usage patterns over the past 20 years.
E-mail, as you can see from the chart, might as well be reduced to a rounding error. And even though there’s no correlation between the de- mand for broadband bandwidth and the usefulness of the material, it’s a safe bet that the paths along which data flow through the World Wide Web will continue to change. For that matter, with the rise of apps and APIs,* who can say whether traffic on the Internet will continue to flow through the World Wide Web at all? Furthermore, a lot of this data is flowing through infrastructure that was built by entrepreneurs who hope they’ll be able to monetise it one day. But who, once push comes to shove, will hit the pay button to watch a home video, a photo library of every moment in the baby’s life, or a low-resolution broadcast of a pirated movie?
So while the volume of data will continue to expand, some of the channels that data flows through, and some of today’s data sources, will disappear over time. Advertisers and marketers, for instance, might not be able to track Web users’ habits much longer—at least not with- out their permission. And closer scrutiny of some of the newer forms of analytics is almost certain to lead to restrictions as a result of privacy concerns. So even as the volume of data increases, advertisers and mar- keters can’t assume they’ll continue to have access to the same data sources they can tap today. Still, while the relevance of this material, no matter how it’s transmitted, is open to discussion, its content, its purpose, and the way it was created—in other words, the metadata that describe it—cannot be ignored.
The Daily Crunch
Most of us have our smartphones in our hands as we drink our first cup of coffee in the morning. And before we embark on the daily trek to the office, we’re already thinking ahead to the first conference call of the day. Or to the endless meetings that jam our calendars. Or the follow-ups with vendors or the proposals we’ve been asked to review— or, most important, the pitch we’ve been meaning to make for more resources. But as soon as we arrive at the office, even those quickly rearranged priorities come under attack.
Did you get a chance to read the report? Have you thought about the expan- sion, reviewed the presentation, checked the project status? Did you sign off on the budget? Before you’ve gotten through the first 10 e-mails in your inbox, your phone rings.
As you answer a question, you glance at your calendar, trying to remember if your 11:00 a.m. meeting is a brainstorming session, an information-sharing meeting, or a meeting that requires a decision from you. By the time you put the phone down you feel like you’re in a batting cage, facing a pitching machine that never stops throwing balls at you. And before long you just start swinging at anything that comes your way, whether or not it’s near the plate.
By the middle of the afternoon you feel like you haven’t actually done anything. And the rest of the day is more of the same. In meetings or on calls, you’re faced with one of two things: incomplete data that leads to rambling, pointless conversations, or a mountain of numbers you wouldn’t be able to dig through even if you were behind the con- trols of an earthmover. So what do you do? You work even harder, and before you know it your personal tachometer begins to redline. But no matter how much faster it spins, your engine won’t deliver any addi- tional horsepower or results.
You’ve lost your focus, and your day has lost its purpose. Instead of focusing on the right data, and considering it in light of two or three simple principles, you’ve done nothing more than keep up with your latest runaway day. And what’s worse, it’s not as if someone asked you to put the final details on the master plan for “growing the company over the next three years.” All you’ve been trying to do is get your hands on the information you need to make the routine, daily course corrections to keep your team’s plans on track.
Research is to see what everybody else has seen, and to think what nobody else has thought.
—Albert Szent-Györgyi, Hungarian biochemist and 1937 Nobel laureate in Medicine
If you continue doing things the way you’ve always done them, your tomorrow won’t be any different than your today. And data overload will continue to bury you and everyone else beneath it. Your inbox will be jammed with even more e-mails “inviting” you to attend another round of presentations, meetings, and conference calls.
And every in- vitation will be accompanied by new facts and figures. And day by day, your desk will be buried even deeper under proposals you have to re- spond to or surveys you have to evaluate or data on market size, sales trends, growth plans, and emerging segments you have to read.
In other words, seeing what “everybody else has seen” is the prob- lem. What you’ve got to do instead is start by finding the data you need. And to do that, you’ve got to ask the right questions. Only by asking those questions—and asking them repeatedly—will you have any chance at “thinking what nobody else has thought.”
Again, we’re not from some think tank. We’ve experienced data overload firsthand, just like you have. And we’ve gotten to the point where we’re not going to put up with it anymore, because we’re sure there’s a better way.
Hence the Seven Questions. And for what it’s worth, we didn’t pick the questions out of a hat or come up with them over the weekend. They’re based on our frontline experiences in the small-business and corporate worlds over the past 20 years. During that time, we’ve been present at the birth of countless small businesses and we’ve worked with some of the biggest players in the venture capital com- munity. We’ve also worked for some of the most iconic brands in busi- ness—brands like American Express, IBM, and Microsoft. So when we say that both Fortune 500 corporations and poorly funded start-ups suffer from data overload, we’re speaking from experience.
Whether we were working on shoestring budgets for new ventures or had millions of dollars to spend on ad campaigns or product roll- outs, we know what it’s like to be inundated by data on customers, data on the markets, and data on the competition. In fact, as it turns out, one of us was generating the data and the other using it to launch new businesses or further develop existing businesses. One of us de- signed the studies, and the other analysed the outputs. Both of us have written business plans, and both of us have made pitches to investors. Both of us have put businesses on their feet, and both of us have watched some of them fail.
We came armed with the key performance indicators (KPI). We pored over forecasts, projections, scorecards, trends, gaps, targets, and pipelines. And a lot of the data was both eye-opening and actionable, but more often than not, there was so much of it that we either were overwhelmed or, once we got through it, didn’t have any time left to analyse it.
And we contributed to information overload, too. As part of our attempts to launch new products, we built spreadsheets on top of spreadsheets. In our attempts to collaborate, we wrote e-mails with distribution lists longer than the messages themselves. What were we thinking?
Like Michelangelo, we knew there was an angel in the block of marble, but there was so much waste to chip away that we hardly ever got to it. And sometimes, after swinging our mallets for hours, we were so worn out that we forgot what it was we were looking for and smashed through an arm or a leg without realising what we were doing.
In other words, these questions are already battle-tested. We know from personal experience that they’ll work on market research. They’ll work on sales data too, and on social-media output. They’ll work for marketing, finance, operations, and strategic planning. And they’ll work for start-ups just as well as they’ll work for global corporate giants.
Our search for the answers in the data, in fact, led us to the first Fire Hose Question, which we now call the Essential Question— namely, what is the one indispensable piece of information we need to move forward? And that question led to others. Are we getting hung up on short-term numbers and missing long-term trends? Did we get the results we expected? Do these survey results truly tell us what our customers want? Are we paying enough attention to our existing customers? What, specifically, would attract new revenue and new customers? Where are the bumps in the road? And finally, once we’ve got the information we need, what do we do next?
To give you an idea of what can happen when you ask the Fire Hose Questions—and someone answers them—let’s take a look at another hypothetical meeting.
A meeting with a purpose
It’s late afternoon. You’re sitting in a conference room with no win- dows. The lights are low and the projector is humming. Six of your colleagues are there, including the head of market research, the social- media manager, and two of the more successful salesmen in the com- pany. A few people are typing on their phones. Six others have dialed in on the phone. The meeting starts on time. One of the key people couldn’t make it, but she sent a delegate with a real understanding of the issues and the authority to make decisions on her behalf.
20 minutes into the meeting, the presenter is on slide nine of a twelve-slide deck. At first glance, even before the presenter begins to explain the significance of the numbers represented by the simple pie chart, you’ve already grasped their significance. Everyone in the room is focused on the slide. People are asking questions. They’re engaged.
This is an information-sharing meeting, not a decision-making meeting, so there’s a lot of back-and-forth. Every time the conversation slows down, the presenter moves to the next slide. There are a lot of questions, many of them from senior staff. As the presenter gathers answers from everyone in the room, he refers not only to the slides in his deck but also to the company’s long-term strategic plans.
The meeting runs over, but no one’s complaining. There’s another meeting scheduled for the following week—a decision-making meet- ing—and they want to be sure they know what they want before they get there, and have voice in the final decision.
In the introduction, we’ll go over the Fire Hose Questions one by one, then lay the groundwork for the practical applications and the case stud- ies that follow. Before we do, we’d like you to take the following short quiz. Answer each question with either “frequently” or “infrequently.” Give yourself one point for each time you answer “frequently.” If you score a 5 or higher, you’ve got the right book in your hands.
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