Making informed decisions is a critical skill for any business leader, big or small. The success of a given company or organization depends on tactical, confident, informed decision making. The operative word here being informed—it is crucial that the information business leaders are using to drive their decisions is, in fact, accurate. Knowledge is power, as they say, and really knowing one’s data is sound is what separates the anecdotal thinkers from true analytical thinkers.
Anecdotal thinkers, those who heavily rely on personal experience or stories to make decisions, might approach a business decision with something like, "in my experience, this is how it works." And while they're not necessarily wrong, their perception of fact is based on limited data. Oftentimes this can be like looking at things through a keyhole, with a limited perspective. Through the lens of high level business decisions, this method of thought can be as accurate as making assumptions or guesses, albeit relatively informed ones, but can ultimately lead to costly mistakes. By contrast, an analytical thinker might approach that same scenario with a more data-framed perspective, like, "based on the research, this is what we should do," or, "the numbers show that this is the best option." By leveraging data to support their conclusions, analytical thinkers are able to reduce guesswork and make informed decisions based on evidence, thereby reducing the risk of costly financial mistakes.
Analytical thinking involves collecting data, analyzing it, and drawing conclusions based on the evidence—a process that, along with proper planning, is paramount to making confident, strategic business decisions. Data comes in all different shapes and sizes, and can come from a variety of sources, from surveys and direct customer feedback, to sales reports and market research. By critically analyzing data relevant to a business or specified demographic, a savvy business owner can draw informed conclusions and edge out competition over time. Personal experience can tell you a lot about someone’s worldview, but informed, pragmatic decision making can tell you a lot about one’s ambitions and potential for success.
Just being aware of the difference can be invaluable. It can help shift interactions with other business owners, potential partners, or vendors. In conversation, the difference between “I think” and “I know” can be the difference between someone who values data-driven decision making versus someone who might just be postulating based on limited personal experience. Data doesn’t lie, and data-driven leaders will seek others on the path to longevity. As such, those who use data to their advantage are better positioned for long term success. The next time a key business decision arises, consider the difference between “I think” and “I know”—it’s what separates fact from fad, trend from truth.