Why Your Data May Be Useless

dataWith so many companies focusing on analytics there is more data out there than ever before. Before you rely on it, however, you need to make sure you have one more item: context.

Without the proper context, data can be manipulated to prove almost anything. Case in point: the recent U.S. elections. There are those who proudly claim the Democrats have a mandate to oppose President Trump because they took back the House of Representatives. However, when you put the election in historical context, the Democrats won fewer seats than the opposing party usually wins in mid-terms election. Not only didn’t the Democrats get their “blue wave” but they didn’t do as well as they should have done by historical measures.

The same analysis holds true for your business. If you look at your metrics and see sales are down 4% you assume that is bad. If you look and find the industry as a whole is down 18% your data means something else. Data needs to be put in context to have meaning. Whether that context is comparing it to an industry, historical data, or something else depends on what you are looking at. Whatever it is, don’t look at the data without putting it into context.