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Be a Data-Driven Decision Maker in 2021

Posted by Alex Chausovsky on Jan 11, 2021 1:45:13 PM

The start of a new year presents an opportunity to do things differently. The ITR Economics team hopes that one of your New Year's resolutions is to be a data-driven decision maker in 2021. There are many ways to implement this initiative, but the most effective method focuses on one thing: your company data. Leveraging your company’s historic performance, you can calculate your rates-of-change and identify reliable and accurate leading indicators that will allow you to get ahead of the curve.

There are four main ways to leverage your company’s rates-of-change – as well as the rates-of-change for your markets and the overall macroeconomy – to improve your decision-making process:

  • Business cycle phase identification: Plotting your rates-of-change will help you identify what phase of the business cycle your company is in, offering near-term perspective into the directional momentum of your company.
  • Benchmarking: Plotting your rates-of-change (for sales, orders, or any other metric you use to analyze the performance of your business) versus the rates-of-change for the markets into which you sell will provide insights into your relative performance. Are you underperforming, outperforming, or simply keeping pace with market growth?
  • Capital deployment: Making investments based on where you are in your business cycle will enable you to prosper during that next period of economic and industry expansion.
  • Resource allocation: Evaluating various industries using rate-of-change analysis, you can better identify the sectors that your sales and marketing efforts should target this year and beyond.

Effectively implementing rate-of-change analysis and the strategies outlined above will enable you to become a data-driven decision maker and, as a result, a better business leader. ITR Economics wants to help you achieve your goal, so we’ve developed and made available many free tools to support such an initiative in 2021. Please visit our methodology page to learn more about calculating rates-of-change and leading indicators. If you’d like some help in implementing this process at your company, we’re here to support you.

 

Alex Chausovsky

Senior Business Advisor

Topics: ITR Experts Say