We are, and have been, in a highly dynamic environment for the better part of three years, from the pandemic to supply chain disruptions, and now from persistent inflation to highly volatile economic conditions worldwide, ranging from global markets to rising interest rates. How should corporate leadership defend their businesses against this volatility that is wreaking havoc?
Take a cue from a fighter pilot.
Not all that long ago, business leaders suffered from too little information. But as technology grew in sophistication, access-to-information barriers have been largely removed, leaving a new problem for companies to address and solve: information overload. We are data-rich, as they say…but often, knowledge-poor.
Not only has our access to data and information grown exponentially, the rate of change continues to accelerate with each passing year:
“Human- and machine-generated data is experiencing an overall 10x faster growth rate than traditional business data, and machine data is increasing even more rapidly, at 50x the growth rate.”
When economic or business conditions are relatively static, an abundance of information is not a great threat to company leadership nor its business trajectory. But in dynamic conditions, where things are volatile or unexpected, or dramatically changing overnight, a wealth of data but a dearth of information can be devastating to growth, operations, management and profitability.
Which brings us back to the (literal and) proverbial fighter pilot.
If you’ve ever seen inside the cockpit of a modern fighter plane (even if it’s only in the movies!), you get a sense of what it means to “contextualize data.” Presented with an overload of information, in the form of gauges, dials, read-outs and displays, the human brain inside a pilot’s head can’t possibly process all of the data available to it at any given moment. So what the plane does is determine what is the most relevant and critical information, given the present and anticipated conditions, and presents just that data to the pilot, projected on the windshield in front of the pilot.
Now the pilot can focus on only what’s truly relevant and important, given the unique circumstances of up-to-the-moment conditions. No longer is the pilot drinking from the proverbial fire hose, but rather processing a single stream of acquirable intelligence.
What’s critical to understand is that this contextualized data is entirely dynamic and responsive to the conditions the plane is under. If the aircraft is simply traveling from Point A to Point B, the data displayed is rather static in nature: perhaps altitude, airspeed, trajectory, fuel consumption, etc. But should the plane suddenly come under attack, the situation immediately goes from “static” or fluid to dynamic and volatile. An entirely different, but now imminently more relevant, data set is contextualized and presented to the pilot, so the fighter can defend the craft against the attack…or even go on the counteroffensive.
This is both an apt metaphor for business leaders and an actual example of the technology such leadership should embrace when it comes to monitoring, measuring and optimizing business performance.
The human brain — what businesses rely upon to craft strategy and make critical decisions — has already undergone this evolution toward data contextualization for us. Our brains can only process and produce a finite amount of data at any given moment, so under times of distress or volatility, we focus only on survival inputs and actions. While being chased by a bear, we might have access to the current air temperature, but the brain doesn’t care about it, so that data point never enters the mind. It only cares about the location of the bear and possible avenues of escape. That ability to process information and focus on only our survival instincts is part of the reason humans still walk the planet to this day.
Now it’s time for businesses to undergo that same evolution.
Consider a doctor who sees many patients throughout the course of a day. The rate of change relative to the physician’s access to information in modern medicine has greatly accelerated over the years. A doctor can now see infinitely more diagnostics, screenings and data points compared to a generation ago. But when a patient comes in presenting specific symptoms or making specific complaints of localized pain, the doctor can immediately focus on what he or she deems to be the relevant data points, scans, diagnostics and test results. Not everything…just what matters.
If the patient comes in for an annual physical, the standard tests and results apply. If the patient is rushed to the hospital with acute chest pain, you know where the emergency physicians will focus their attention.
This is how managers, leaders and company owners need to address both the KPIs they monitor and the processes they implement for the immediate and foreseeable future. While not all companies are in survival mode, most are experiencing dynamism, volatility and unpredictability. The standard and static business dashboard is no longer the best barometer, nor should it be the focus of the C-suite. Rather, different, contextualized data sets should be projecting to the proverbial corporate windshield, reacting and responding to dynamic inputs and ever-changing scenarios — at least until things stabilize again at some point down the road.
Unlike human evolution, this won’t happen naturally for businesses. So the course of action needs to be deliberate, proactive and prioritized. Here’s how I would advise leadership teams to facilitate this necessary evolution initiative:
1 – Connect data systems together so they can speak with, and learn from, one another. The first step toward contextualization is getting your data sources integrated and achieving interoperability. Contextualization is nearly impossible if some inputs are being ignored or siloed unintentionally because they can’t be brought together and analyzed all-inclusively and synchronously.
2 – Train the machines to read and react. Machines and computers are not naturally programmed to learn, contextualize and filter out data, in many cases. This needs to be intentionally programmed into the systems so that they can detect signals of volatility or change, then know how to react to dynamic conditions and trigger redirections or reactions “automagically.” Just like a fighter plane can now understand it is coming under attack, and how to warn the pilot through the presentment of filtered, contextualized data, the company’s technology should be on the lookout for volatility and know how to respond accordingly.
3 – Keep it simple, Simon. I believe that, during times of high volatility, less information is better, as it, again, allows the reader to focus on what’s truly relevant and critical. The simpler the dashboard or system is, the easier it is for it to present dynamic information that is more quickly processed and understood by the human brain that is already wired to focus on what seems most important. Too many inputs during times of change or tumult can result in too many possible outputs and increase margin for error.
4 – Remember why we call it “information technology.” Embrace available advancements in technology to leverage systems that turn information overload into actionable insights. When strategic priorities are applied to software programming and implementation, this very action codifies your commitment to dynamic data focus and puts rigor around it. If you’ve ever uttered “I wish we could’ve seen this coming earlier,” use that as your motivation to act now to prevent the next volatile swing from negatively impacting your business before it’s too late to react and neutralize or mitigate oncoming threats to profitability and productivity.
So many times, the dots are easy to connect after the fact. In so many instances, times of trouble are predated by other trends or changes in conditions that naturally lead to later predictable outcomes. When it became obvious that inflation was more than transient, it would seem likely to expect higher interest rates at some point down the road. With higher interest rates, it would seem to intuit that new mortgage applications would slow down eventually. With fewer expected mortgage applications, how would banks, lenders and realtors take preventative measures to mitigate whatever long-term effects were in the offing? Does the dashboard change? Does the flight pattern ahead look any different? Almost certainly.
That’s what modern technology should be doing for your company, even as you focus your attention elsewhere. A system can understand correlations, detect patterns, and present warning indicators while there is still time to correct course.
If your business is experiencing times of change — entering cost reduction mode, dealing with supply chain disruption, changing production forecasts, reacting to inflation and higher costs of doing business — you and your team are like pilots in the cockpit during a dog fight.
It’s time to read and react. Make sure your systems are contextualizing data in real time. There are sure to be smoother skies ahead. But for now, it’s time to embrace change, welcome dynamism, and shift focus to the most critical data sets at our disposal.