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30 lessons I learned managing people for the first time

30 lessons I learned managing people for the first time

I joined a startup out of college, wanting to effect change and make an impact right away.

Two years thereafter, I was thrust into a management role. It was exactly what I wanted. It started with a couple direct reports, and over time, I found myself leading 20 analytics professionals. Having no prior management training, I made many mistakes. People have quit, projects have failed, and targets have been missed. That said, I’ve also successfully helped the company grow from 12 to 100+ team members.

I owe my team for all the knowledge I’ve gained. The team that served as guinea pigs early on, forgave me time and again, and never gave up in our pursuit of success. Here are 30 lessons I learned on my journey so far:

  1. Don’t set any expectations with new hires, apart from the need for them to learn and ask a ton of questions. In other words, expect them to be curious. Expecting anything more has a high chance of catalyzing impostor syndrome.
  2. Before trying to influence people, first gain their trust.
  3. Perks, ping pong, and free beer matter less to team members than a purposeful mission, fast-tracked professional development, and fair compensation plans. Plus, all these standing desks, designer offices, and free food create a comfortable and entitled atmosphere that incentivizes chilling, rather than the underdog culture that pushes people to strive for more, to win. Which one do we want?
  4. It’s unreasonable to expect our boss to be perfect. It’s unreasonable to think that the CEO knows everything, and will always take the right decisions. We have a much better view of the challenges facing the business from down here. It’s thus our duty to speak up.
  5. One of the world’s top thinkers (Clayton Christensen) has researched and explained how to disrupt a market. We thus don’t need to reinvent the process or “figure it out” all over again. Let’s just make sure that our solution is actually disruptive and not sustained in nature (i.e. a solution that offers worse performance than existing solutions at first, and that existing clients don’t want right away, but that can be improved rapidly)
  6. Innovation isn’t brainstorming a ton of ideas and trying everything that seems interesting. There’s a systematic process that can make innovation projects much more effective, starting with problem definition, not problem solving.
  7. Forecasting is overrated. Scenario planning is much more critical when it comes to planning for the future.
  8. Managing my boss is just as important as managing my team. I have to understand that my boss doesn’t have time to explore what I need, how I’m doing, and what is reasonable to expect from me. It’s up to me to communicate all of that.
  9. As the organization grows, there is a tendency for teams to work in silos; caring only about their specific team goals. This can be detrimental to the organization as processes that require cross-team collaboration (i.e. everything) can break down. When/if that happens, everyone needs to come together and see the company as one unit, working towards the same goal.
  10. Surveys are misleading and lack context. Instead, let’s make time to observe. Observe team members to get a sense of their fears and motivations, observe customers to understand their pain points, and observe leadership for clues on the business challenges ahead.
  11. Toxic culture will destroy a companyThis includes both organizations where people stay silent and don’t bring up problems, and those where leadership listens to problems, but sweeps them under the carpet. Dishonesty prevents the company from seeings the obstacles ahead and plan accordingly.
  12. Don’t let instincts get in the way of a great work culture. Our subconscious can behave differently than desired, leading to biased decisions that hurt the company.
  13. Before hurriedly analyzing data to answer a question, let’s first why we care, what actions we plan to take, and what reports we envision being useful. Otherwise, it’s very likely we’ll get distracted by data and waste time.
  14. Adopting the right metrics helps to guide people when we’re not there and reminds them of what is important. It’s thus crucial for effecting change.
  15. Define the problem before solving it. Too much time is wasted solving the wrong problems.
  16. When it comes to decision making, the most important step is to evaluate all potential outcomes and to plan around each scenario. Nothing ever happens as planned, so we need to stand ready to face the worst case scenario.
  17. Before taking a decision, let’s first check our blind spot: Look for biases, subconscious tendencies, and invalidated assumptions.
  18. A hiring process is comparable to a sales process: A funnel with multiple stages that can be improved. The goal is to maximize the ratio of [people interviewed] over the number of [people hired and successfully working with us].
  19. Even A-players will feel unsuccessful without clear expectations and goals.
  20. Great insights are often lost because we don’t think to ask people about their past experiences. Before going live, let’s ask team members whether they’ve worked on similar projects, have experience with a new role we’re creating, or have previously implemented a change we’re considering.
  21. Implementing change is hard, because human beings are animals of routine. Before changing, we need to plan ahead, win hearts & minds, and reach mutual agreement. Ideally, change feels like a natural evolution everyone is excited about.
  22. Having too little processes makes operations chaotic, while having too many processes brings inefficiencies. A fine balance can be found via a set of guidelines that empowers team members to make individual calls.
  23. We should feel comfortable to disagree with our boss and challenge their opinion (with evidence). A healthy culture welcomes constructive debate and feedback.
  24. Shying away from having tough conversation and giving constructive feedback will make us frustrated in the long run. It’s a sign that we’re not comfortable exposing our thoughts. To make it less personal, we can focus our feedback on the behavior, not the person.
  25. Great leaders are also great coaches who diagnose, train, and support their team members. It’s unfair to delegate tasks to team members without diagnosing their capabilities first. It sets them up for failure.
  26. If someone is underperforming, they could be: A bad fit, not trying hard enough, or not getting the coaching they need. Work with them if it’s the latter case, but let them go otherwise. To avoid feeling bad when firing someone, set clear expectations, and give the team member a fair chance to improve. Let’s however not hold on to hope if there is no hope.
  27. Goals are important, but not more than everyday advancements. In addition to celebrating goals, let’s make time every day to praise team members’ effort and progress. This reinforces a growth mindset.
  28. +1’s matter. Showing support for other people’s ideas matters. It shows how popular an idea is, which influences the final decision. If we decide not to voice our support, then we are not entitled to complain after the decision.
  29. While we’re on this journey, let’s remember to breathe, to be mindful of the present, and to appreciate the value we’re bringing to our team, our company, and the world. There will always be a new mountain to climb, a new problem to solve. Let’s take time daily to turn around and appreciate the view on this adventure. Yoga helped me a ton with being mindful.
  30. Change jobs and move on when you’ve stopped learning and growing, when the culture is making you unhappy, or when you don’t trust the leadership.

 

Are you leading a startup team? Get started on the right foot with the Start-up Manager Handbook. And subscribe on the right for new insights every week!

Don’t let instincts get in the way of doing the right thing

Don’t let instincts get in the way of doing the right thing

I like to believe that I am an objective being, actively in control of my decisions and actions, especially at work.

Yet time and again, I find myself less than proud of some of my past behaviors. I’ve had demographic biases toward people; I’ve opposed arguments without assessing their basis; and I’ve agreed to ideas that are against my personal values.

Fact is, I am often a slave of my subconscious, of my brain running on cruise control. And I’m starting to recognize that like animals, I have instincts that are challenging to overpower.

Why is this a problem? It’s a problem if our actions differ from our desired actions. If our brain on autopilot takes decisions that go against those we’d take consciously. It’s especially a problem if our instincts get in the way of creating a fair, transparent, and innovative workplace. The type that startup companies in this globalized world need.

So let’s take a moment to recognize our instincts. Allow me to share three instinctual behaviors that get in the way of…

… debating with the boss

I can recall numerous occasions where I’ve disagreed with my boss and yet didn’t try to voice or argue the matter. I’ve disagreed over the team’s compensation plan, our holiday policy, and even our company strategy. Yet on many of these issues, I’ve kept my thoughts to myself.

Why?

Well, to survive of course. Self-preservation is the need to keep myself alive and economically healthy. It is also the reason I will avoid arguing with my boss. Fact is, I see my boss as the hand that feeds me, so the last thing I want to do is to create conflict and paint myself as an enemy. I simply don’t want to get fired.

How can I become more vocal with my thoughts?

Everytime that I disagree with my boss nowadays, I first note it down in my journal to first avoid losing that thought. I then let it sit for 24 hours to ensure that my reactionary emotions are gone. If I still disagree after that, I will start to work on a way to introduce my disagreement, gathering evidence to support my thoughts, and planning for the right time to speak up. I also find it helpful to state my goals (why I’m of this different opinion), because they are often the same as my boss’s goals, so it helps us start the conversation from the same footing.

… being excited about changes

Most people I know react to a new proposed change with skepticism. Not many individuals react to a surprise change with a “Hooray!” Ok, maybe extreme sport athletes do. But for most of us commoners, we love a good old routine.

Why?

For the simple reason that we are creatures of habit and routine. As explored by NPR and Psychology Today, our habits and routines help us navigate our days with greater ease, greater comfort. As I’m typing this blog post, I am not actively thinking about which letter to press on my keyboard, my brain has made typing a habit, and I only have to think about what I want to say. There are dozens and dozens of tools that each of us depend on to do our work. To become more productive, we make a habit of using all these tools.

Yet when things change, our habits and routines have to be reset. We thus are naturally upset by change. If someone was to change the letter placement of my laptop keyboard, I’d be frustrated regardless of whether it’s better for my health or not. It simply takes me outside my comfort zone and I have to re-learn basics of typing again. We thus dislike it when people change the tools or processes we’ve grown accustomed to.

Being skeptical of change is in my opinion a good thing – it ensures that we take the time to properly review any proposed change’s potential impact, and take the necessary precautions. Yet this instinct can also backfire when people are stubbornly opposed to change without reason. According to some studies, 70% of change management initiatives fail. I’m willing to bet that people’s instinctive opposition to change has something to do with that.

How can a workplace assess changes objectively?

On our team, we first make sure that there are no surprises. No changes are made or even proposed before we first accurately pinpoint the problem at hand. We then work to ensure that all stakeholders agree on the problem. Only then do we start working to find a solution to the problem. Since all impacted parties are already involved and have agreed to participate in solving the problem, there is usually little to no opposition to any proposed changes. They architected it together.

… objectively judging people, especially individuals that are different

When I interview candidates, I often find myself asking more questions to people that did not come from a background (education, experience) similar to those of existing team members. In a way, we could call it playing it safe, but on another level, I’m simply judging people differently because they come from different walks of life.

As I consulted colleagues from other companies and startups on how they handled these situations, it became clear that this problem exists across industries, and in companies large and small. Age, gender, education, ethnicity, and even fashion discriminations were rampant. My colleagues and I both suffered such discriminations as well as contributed to them. We realized that most of the time, people were not even aware that they were discriminating. We’re talking about really smart, often Ivy league educated managers that would fight for feminist causes or march with Martin Luther King should he still be with us.

Why?

In my opinion, it comes down to the fact that we fear the unknown. We are afraid of things we are not familiar with: Foreign cultures, people, ideas. Here, foreign can take the form of a different neighborhood in the same city, not just another country. In its worst form, our fear morphs into Xenophobia, as witnessed in the recent Brexit. Day-to-day, we avoid certain parts of the city, sit with colleagues that are similar to us at the cafeteria, or ask some people more questions than others at interviews.

Again, why?

The question then begs… Why in our multicultural society (at least in much of the western world), are we still so afraid? Haven’t we been exposed to enough different people, cultures, and ideas that we can comfortably shed away our biases?

Well, fact is that even though there are multiple cultures found near each other geographically, there are limited interactions between them. Cultures are not mixing.

Simply glossing over a demographic map of the USA will expose the fact that most neighborhoods in cities are segmented demographically. African Americans, White Americans, Asian Americans, and Hispanic Americans can all be found living apart from each other, in different neighborhoods. How do we expect to really understand other cultures if we are never exposed to them? Do we really understand their differing values and cultures? The situation is even worse in rural areas and smaller cities.

So this leaves us popular culture to educate us on the values and lives of foreign cultures. Yet no luck there either. According to research from USC, 73% of actors in Hollywood are white, 13% black, 5% Asian, and 5% Hispanic. That means that we are all overwhelmingly educated on white American culture, but little else.

All these stats are further augmented by the fact that 75% of white Americans do not have non-white friends. White Americans thus have no clue about the values, culture, and ideologies of the ~70 million non-white neighbors they share their land with.

This problem persists in the startup ecosystem and Silicon Valley, where most people are White or Asian. It reflects the demographic of university populations.

So how can I avoid being biased toward foreign people / cultures?

Simply being aware that we feel safer around people like us, and less so around those that look and think differently is a good start. Acknowledging we need people who think differently for innovation may be the next step. Let’s not fear our differences, but embrace them. We are all different, not better or worse.

The next time that candidates are being interviewed, perhaps we should take cues from musical orchestras and do it behind a curtain with voices masked. I’m kidding. Let’s all start with being more aware of how our brain operates on cruise control.


Recommended exercise

The next time that someone proposes a change, at work or at home, on how we do things, take note of our initial reaction. Did we oppose it instinctively, or did we keep our mind open and curious?


Are you leading a startup team? Get started on the right foot with the Start-up Manager Handbook. And subscribe on the right for new insights every week!

5 Ways yoga makes me a mindful leader

5 Ways yoga makes me a mindful leader

There was a time when a day never had enough hours.

I’d start work at 7 or 8 in the morning, checking emails right after waking up. I’d either skip lunch, have it at my desk, or have it during a meeting. By the time I realized it’s already 7pm, I’d have gotten to less than half of my day’s to-do list.

And I loved it. Working gave me purpose. A busy day like that made me feel important and valuable.

Until it didn’t.

My family life hit many challenges. I was never present with them. On vacation, I’d get bored at anything we did, finding little value in spending time “unproductively.” I went in and out of top restaurants at the same speed as drive-thrus. And worst, I neglected my partner in life, my best friend, the love of my life. I spent very little time acknowledging her needs, often failing to listen… thinking that my life was more important.

That’s when I knew I needed to stop and smell the roses. I hadn’t been able to enjoy the moment for years… always preoccupied with the next step.

So I picked up yoga. I chose it because I wanted to take on an activity that I perceived as “useless” professionally, that would snap me out of my daily routine, and that would take me out of my comfort zone. And if I got a good stretch out of it, why not?

I thus signed up for a Groupon at a local yoga studio. It became the best thing that ever happened to me all year.

It was everything I expected, and more. It did take me over six months to start feeling what it’s like to live in the moment, to focus on what I’m doing. I still struggle at it. Yoga also made it apparent when I failed to be present: I simply fell from my poses. Falling helps me recognize my mind has gone astray, subconsciously. And that’s when I actively bring my mind back to the moment.

Ironically, taking the time to be away from work has also allowed me to reflect more comprehensively about work. That’s right, I owe to yoga many important lessons in leadership. Here are five of them:

“It’s ok to fall, it shows that you’re trying.”

My yoga teacher said this to me a lot when I first started.

I’d be falling left and right when trying to balance my poses. Her words encouraged me to keep trying and to push myself.

The same can be said of innovation. If we truly want to do something new, may it be a new product, new process, or new business model… we have to be OK with mistakes. We have to create an environment where team members are comfortable trying new things. It’s when we make a stretch mistake that we know we’re trying, that we’re pushing ourselves into unknown territory, that we’re growing.

“Observe differences, don’t judge.”

As a decision maker, it can be difficult to not judge everything around me.

Everyday, I have to judge individual team members’ performance, the team’s progress, the company’s culture, among other things. And it rarely stops when I go home. I keep judging my friends’ behavior, my spouse’s thoughts, and even strangers’ actions. I once judged a mother who seemingly was neglecting her child in a park… Yet fact is, I don’t even have a kid. Who am I to judge?

My constant need to judge also affected my objectivity. I’d often base judgements, and even take action, on unconfirmed assumptions and preconceptions. At work and at home. This hurt the people around me.

In one instance, I received note that a team member said something inappropriate. Without fact checking and without asking for that team member’s version of events, I proceeded to reprimand him. It fired back once we discovered that the person reporting the event misheard the conversation and took things out of context. The damage was done.

Then one day at yoga, we were doing a pigeon pose where we stretch our hips. After stretching the right hip, we proceeded to the left one, and the teacher said “Observe differences, don’t judge. Notice how the left one feels compares to the right.”

That’s when something clicked in my mind.

Being so quick to judge, I had forgotten the importance of observing things as they are. It impaired my objectiveness.

Slowly, with the help of yoga, I learned to simply observe. At work, this translated into spending more time assessing the facts before jumping to a conclusion. Instead of starting conversations with “I think that…,” I asked “Why is it that…” or “What’s the background on…” I became more confident in my decisions, but more importantly, team members trusted my decisions more.

“Practice non-attachment”

As I made my way to yoga class one day, I found myself with a substitute teacher instead of the usual teacher. I really enjoyed my usual teacher and reacted with some disappointment. Yet when class started, the substitute teacher said “I know that many of you didn’t expect me to teach your class today. It’s thus a good opportunity to practice the concept of non-attachment. To be OK when things don’t go as planned. To not be attached to a certain idea or desire.”

She was brilliant. Not only was it one of the best yoga classes I’ve attended, she also reminded me of the importance of being OK with not getting what I want. To simply go with the flow, react accordingly, and not be emotionally disturbed by surprises. Fact is, nobody can predict the future, so why get upset at something that was never certain in the first place?

At work, I applied this mindset when planning for the future. I favored scenario planning as opposed to forecasting when it came to strategic planning. I wanted the team to be ready if things went wrong, and not to be upset by surprises. We continued to try our best in achieving the best case scenario, but we were also much better prepared to face the worst case scenarios.

“Let the teacher and student in me honor the teacher and student in you.”

My yoga teacher ends her practice with this line every single class. At first, I thought to myself “I don’t get it… there’s nothing that I can teach her about yoga.”

Yet one day, while having a random conversation with my teacher, she asked for my advice on something about online marketing. It finally occurred to me that each and single one of us knows something that another individual doesn’t.

Armed with this mindset, I saw my team members in a new light. I perceived their diverse background and experiences as sources of learnings for me and for everyone around them. I actually went back and looked at each individual’s resume to see if I had missed anything about them. I also became a lot more active in asking whether anybody has had previous experiences when it came to implementing a new change or a new process.

Needless to say, I’ve learned a lot more from my team and my colleagues after seeing everyone as a teacher.

“Dedicate your practice”

At the beginning of class, my teacher often starts by asking us to dedicate our practice. I usually go to yoga without much planning, so that question always catches me by surprise. It forces me to ask myself “Why am I here?”

To which I’d respond with: To learn to live in the present, to avoid conflict with so and so, or to stop hating inconsiderate drivers. That question helped give meaning to the time I spend at yoga.

Then one day, I started asking myself that question at work as well: “Why am I at work today? How should I dedicate my work?”

To which I’d respond with: To help solve XYZ, to feed my family, to make a positive impact on…

On good days, asking myself these questions boosts my motivation. And on bad days, they remind me of the bigger mission I’m pursuing, helping to smooth out any temporary bumps in the road.

I can confidently say that dedicating my practice, and my work, helps to remind me of my life’s purpose.

I’ve been much happier since that first day of yoga. It helped me make some good headway in being mindful, in appreciating the time I spend with my family. And in addition to yoga, I also discovered a book that helped me reflect and practice mindfulness: Wherever you go, there you are. Highly recommended to all those that are always thinking about the next thing in line…


Recommended exercise

Let’s ask ourselves: “When’s the last time I didn’t try to get somewhere else?”


Are you leading a startup team? Get started on the right foot with the Start-up Manager Handbook. And subscribe on the right for new insights every week!

When is it time to move on, change job, switch career?

When is it time to move on, change job, switch career?

I acknowledge we all share different priorities, backgrounds, and ambitions, leading to very different career outlooks. I’m thus not going to answer the above question for anyone else but myself.

I do find it important to address this topic in the context of startup leadership. Moving on opens up an opportunity for others, while allowing ourselves to tackle new challenges. It helps everyone realize more of their potential.

What I’ve realized in asking myself this question is that there’s never just one motive. Deciding to move on from one role to another is the result of many variables. I’m thus going to share a set of questions that have helped me make such a decision:

“Am I the best player in the band?”

Learning new things every day is important to me. Therefore, if I’m the best person at doing XYZ at my organization, chances are I’m not learning about XYZ anymore.

To quote, Louis Armstrong (I believe he said this): “If you’re the best player in your band, it’s time to look for a new band.”

This can however be a tricky question to answer, since learning to teach XYZ to another individual is also appealing to me.  It’s not always about learning in the context of gaining new knowledge, but also giving new knowledge to someone else (especially as a leader).

In the end, it comes down to what my motives and goals are.

“Do I agree with where we’re going?”

It doesn’t matter if the company is heading toward a guaranteed gold mine or working on the trendiest technology. If the destination or strategic goals don’t jive with my personal interest, it’s a waste of time to me. I view the opportunity cost of not pursuing something I enjoy as extremely high.

For example, many people would jump at the chance of working on a space vehicle that goes to Mars, yet personally, I couldn’t care less. I am much more interested in solving problems with an impact here on earth.

“Am I more frustrated than I am happy?”

If I experience more anger, frustration, and sadness at work than I experience excitement, joy, and hope, it’s a sign I need to ask myself some serious questions.

My take on the goal of life is to be happy. If I am not happy now, I need to identify why, and do something about it. Yet sometimes, the negative emotions experienced at work can be r of issues outside of work. I thus need to be careful in finding the root cause of my negative feelings.

For example, I once experienced a period of frustration at work, getting upset at anything that didn’t go perfectly. I knew it was not related to work, but rather caused by an issue with my family. It was unacceptable and I needed to do something about it… So I worked to resolve my personal problem, which also made my days at work much more joyful.

“Do I trust the leadership?”

I need to trust that my leaders know where we are going, know why we’re going there, and are capable of taking us there. That they have an explicit strategy.

My trust for the leadership team tends to erode every time they say one thing and do another (words mean nothing anymore), don’t follow up on an ask of mine without explanation (don’t value my thoughts), or ignore concerns I bring up (don’t listen to what I have to say). At a minimum, I need to trust that they have the team’s well-being at heart. If they don’t, then there exists irreconcilable differences between my values and their. It would indicate that it’s time to move on.

A special case with inexperienced leaders / founders is their inability to act on their intentions. They will have the best intentions, but fail to execute. They lack skills, experience and knowledge. In that case, even though I trust their intentions, I do not trust their ability to lead. That’s a sign I need to advocate for more experienced leaders to take over, or move on as well.

“Am I excited to go to work?”

In one of my previous jobs, the first thing I thought about in the morning was leaving work and how I could shorten my day. I clearly didn’t enjoy what I was doing, wasting both my time and the company’s time.

“Is the culture toxic?”

Luckily, I haven’t experienced this first hand. But a friend of mine did.

His manager was verbally and emotionally abusive, often publicly blaming, shaming and yelling at my friend in public.

My friend didn’t fully recognize that his boss was wrong until he quit. The whole time this was happening, he felt responsible for the mistakes and problems blamed on him. It’s only when he compared his new job’s culture with his old one that he realized his manager’s behavior was abusive and discriminatory. To assess whether there exists an abusive relationship with our manager, I recommend reading the signs of abusive romantic relationships and replace “partner” with “manager.”

Beyond bad bosses, a company’s overall cultures can also affect our well being. Perhaps we’re selling products that hurt people more than they help, perhaps we’re deceiving our investors, or perhaps the culture simply doesn’t allow us to be honest with ourselves. If the culture is making me unhappy, it’s time to change culture.

Deciding to move on is difficult. It destabilizes our routine. Plus, we all have to pay bills, support our families, and respond to social pressures. Sometimes, no matter how unhappy we are, we stick with our job, thinking that it’s the best worst thing for us. I get that, it’s hard.

Yes, it does take courage to say no to a steady paycheck and look for a new job (which may not be any better), pursue a passion, travel the world, or found a company. But to make the switch easier, we can start by drafting a plan. Things suddenly get easier and look plausible once we identify small steps that we can take immediately, over the next weeks, and next months, to eventually achieve our goals.

We can work on our personal goals in the same way we helped our company achieve its goals. We can apply the concepts of scenario planning, market research, idealized design, and competitive strategy to our personal objectives. Don’t believe me? Many have done it… Check out “No fear no excuses” by Larry Smith.


Recommended exercise

Let’s ask ourselves: “Am I doing exactly what I want to be doing, and making progress toward my goals?”


Are you leading a startup team? Get started on the right foot with the Start-up Manager Handbook. And subscribe on the right for new insights every week!

Top 6 business intelligence mistakes

Top 6 business intelligence mistakes

These days, companies large and small have an insane amount of data to help with decision making.

A small mom and pop restaurant with a cloud based reservation system can forecast how much ingredients to order for the week. Yet we all still make bad decisions. Why?

First of all, let’s not blame the data. By itself, data can’t do anything.

If there’s anyone to blame, it’s us. That’s right: the human beings behind the data.

We are the ones that decide what data to record, how to record it, how to analyze it, and how to look at it. Between the moment we have a question and the moment we make a decision, there are numerous chances of misusing data and arriving at the wrong conclusion. It’s like walking through a minefield.

Working in the analytics field, I’ve seen hundreds of data analyses go nowhere, wasting thousands of hours of effort. So I’m going to share five of the most prevalent mistakes I’ve seen.

“What’s the actual problem?”

I once helped an e-commerce company analyze their top 10 sources of new visitors. After seeing the results, they were ecstatic to find that both their paid campaigns and their blog were top sources of new visitors. These were channels that they could actively control and scale. So they did just that: They invested more money in their paid campaigns and kept their blog active.

Yet a few weeks in, they started to complain that their effort didn’t translate into higher revenue. A lot of new people were visiting the site, but not buying. Why is that?

The simple answer is that the analysis they wanted answered a specific question: Which sources brought the highest number of new visitors? It did not answer which sources brought the highest number of new paying customers, or high lifetime revenue customers, which would both have been more helpful to their actual problem of growing new revenue. So to avoid wasting time, effort, and money, let’s ask the right questions to begin with.

“Is the sample statistically significant?”

I once observed a sales team cancel a process change after 10 prospects failed to convert under a new process (they handled on average 200 prospects a month). By no means was that sample size significant enough to draw any conclusions yet, scientifically speaking. It was not a data-driven decision. It was an emotional decision.

I’ve also witnessed a case where a company made product decisions based on half-a-dozen phone interviews with select clients that they had good relationships with. This particular company had 500+ clients. Half-a-dozen people among a population of 500+ clients does not represent an accurate view of growth opportunities. In addition, the quality of the sample was also questionable. All clients interviewed had good relationships with the company, which indicates that the opinion of unhappy customers and churned customers were not acknowledged.

Sampling problems, including selection bias and lower than optimal sample size, abound in business intelligence. Startups are especially prone to taking shortcuts and use poor samples. Sometimes, it’s because there is simply not enough data… If a company just started acquiring customers, there may not be enough customers to make the analysis statistically significant. Other times, it’s because of pure impatience… Teams want to take decisions now, not in two weeks, so they often fail to wait for their experiments to fully complete.

The result is a decision based on poor data.

“Are the numbers relevant?

I’ve also witnessed many companies set future sales goals based on historical trends, but then change their entire sales process and expect the same goals to be hit. How can one expect the the same forecast when all input variables have changed?

It’s like expecting to fly from New York to Los Angeles in 6 hours, but then change our plane for a car and still expect to get there in 6 hours.

Let’s recognize that the analysis or forecast that we do is only good for the scenario that we considered. Should we decide to tweak or change our scenario, a new analysis needs to be performed.

“Are you sure the numbers are right?”

NASA once lost a $328 million satellite in space because one of its components failed to use the same measurement units as the rest of the machine. Target lost $5.4 billion in Canada partially because its inventory system had incorrect data.

Time and again, huge mistakes were made because the underlying data fueling these projects was bad to begin with.

So to make sure that my analysis is accurate, I often ask a second party to check the numbers. One should never review their own essay. The rule applies to analyses as well.

“What does this mean?”

Having access to information doesn’t mean that we know what to do with it. I’ve seen many people confused by data reports and unsure of what decision to take.

I once helped a B2B company evaluate which customer group to target for an advertising campaign. Their product was used by customers from three different industries, but they didn’t have the resources to tailor their sales processes and marketing content to all three groups yet.

So they began by looking at revenue generated by the three industries. Then they looked at revenue growth over time, profitability, and lifetime revenue. The results showed that 50% of their revenue came consistently from one industry, but that another industry was the fastest growing, going from 10% to 35% of their revenue over the past year. Both were potentially good choices to target and they didn’t know which one to pick.

I thus asked them to divide the total revenue by the number of clients/companies in each industry, effectively giving us the average revenue per client. My logic was that their sales and marketing efforts were going to be spent on a select number of prospects, so targeting prospects with higher individual revenue may yield a better ROI (e.g. between a $500/year client and a $5,000/year client, I’d advise to choose the $5,000/year client assuming that cost of support is similar). Based on the analysis, we saw that the fastest growing industry was also the one with the highest paying clients. This thus made the decision easier.

The point is that looking at the right information is important, not just information. This requires people that can interpret data, explain caveats, and tell a story. I thus highly recommend for all managers, data analysts, and data scientists to read Cole Nussbaumer’s Storytelling with Data book.

“We deleted what?

I once tried to help a SaaS company understand their user churn trends, only to discover that they delete customer account information 3 months after a user deactivates their account. This meant that there was only data on recently churned clients. The sample proved to be too small and biased to draw any useful conclusions.

Developers may delete data because they are running out of room on their hard disk, or because they think that a certain piece of data is unimportant. Regardless of what developers think, from an analytical perspective, we should never ever ever delete data.

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