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Newsletter: Data or Information?

Dec 15, 2009 5:23:00 AM / by Tim McCarthy

In business, as well as in life, we are awash in data and starved for information.  Great business plans focus on developing a few manageable goals versus solving all organizational problems in one plan. [more]

My sister, Kathleen, is a PhD in communication research. She used her degrees for a long career in advertising with a great advertising agency, Leo Burnett, then with the Schering Plough brands, Maybelline among them.

One time long ago, I was having trouble with the research part of a strategic plan I was writing for a big client. After a lot of questions, Kathie said, and I've since never forgotten, "Tim, it seems to me that you have compiled a ton of data but you have very little information."

A little later, under the best ad guy I ever worked for, Jim Johnson, I was taught another lesson in translating data into information. Jim titled it "Issues and Implications" and since the device has come up in my classes lately, it seems worth sharing.

Every good business plan, profit or non-profit, begins with a detailed situation analysis. User data, target audience definition, financial data analysis, competitive and market review and so forth are developed as background for planning. Often this section ends with a SWOT analysis - a list of the organization's strengths, weaknesses, opportunities and threats. To me, a plan without a good situation analysis is not a plan, it's a prayer. Good planning must begin with good data and analysis. However, focusing that plan on too much data is often where strategic mistakes begin. And that's where Johnson's advice comes in handy.

Jim would never allow me to go from the situation analysis right to the goals and business strategies. He always insisted that we stop and write this little section called "Issues and Implications." This brief section requires two disciplines.

Step one is to distill all the data into a few key issues that the data suggest are the most important.

"No plan can fix every problem, McCarthy," I'd hear from his office down the hall. (Jim often neglected to use his telephone when commenting on my plan writing.)

For example, let's say I had a client whose revenue typically falls in January and February and caused them cash flow problems. I would state the issue as: Seasonal revenue decline affects cash flow.

Step two then required asking: What does this key issue mean?

The drill was to decipher its implication for planning. What does a chosen key issue imply that we are able to address in the plan?

In the case of seasonal revenue decline, maybe it means an advertising or sales campaign must be developed to bring winter revenues up. Other organizations might respond with cutting costs during down revenue periods. This particular issue one time led to transforming the organization's work force to part-time/temporary so that they could expand and contract as business flowed by project and season.

It doesn't really matter what the result of your issue and your implication indicate, it only matters that you address them. I also suggest you limit the number of issues to only the most pressing, in priority order.

Trying many strategies to solve many problems ruins a plan just as surely as being all things to all people ruins a person.

"Focus, McCarthy, focus!" the late Johnson's screaming is ringing in my ears as I write. And I can hear my sister telling me to turn data into information before we start setting our goals.

The problem of too much data and too little information (leading to too many issues and too many solutions) interestingly does not occur only in business. It is everywhere in our media-drenched society.

Think about health care, as just one example. I'm working hard to develop my point of view on this complex issue and it seems almost impossible. I feel awash in data and yet very under-informed.

I've decided that I can't come to an opinion because, like my business planning students, my friends and the media are telling me their opinions first, disguised as goals then backing their opinions up with data that fit their view.

That's human nature, but it's also the road to destruction of a good and workable plan. And it's a danger in our lives as well as our businesses since data, mixed with opinion, is everywhere.

200+ cable channels broadcasting 24 hours of data and opinions yet precious little information is now being made more overwhelming by an infinite internet.

And so we jump from story to story, fact to fact, to form our life plans on a dead run. The result is often frustration from an unfocused life.

Note: This is not a media bash. I believe its ubiquitous presence does much more good than it does harm. The darkness of our world cannot survive the light of media, so I'm thankful for it in the broadest terms.

But I do notice myself jumping from issue to issue, worry to worry and goal to goal. If I'm not careful, I will end up with too much data and too little information to plan my life; just like I used to plan my business - to be all things to all people.

And to focus on everything is to focus on nothing.

Tags: Newsletter, Planning, Situation Analysis, Focus, Market Research, Marketing

Tim McCarthy

Written by Tim McCarthy

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