Lauren Woodman asks an interesting question:Are we too obsessed with data?:
In the 1970s, 7-Eleven in Japan became independent from its parent, Southland Corporation. The CEO had to build a viable business in a tough economy. Every month, each store manager would receive reams of data, but it wasn’t effective until the CEO stripped out the noise and provided just four critical data points that had the greatest relevance to drive the local purchasing that each store was empowered to do on their own.
Those points – what sold the day before, what sold the same day a year ago, what sold the last time the weather was the same, and what other stores sold the day before – were transformative. Within a year, 7-Eleven had turned a corner, and for 30 years, remained the most profitable retailer in Japan. It wasn’t about the Big Data; it was figuring out what data was relevant, actionable and empowered local managers to make nimble decisions.
I worked at a Hollywood Video in college, and always wondered why they collected information about the weather at the end of the day. “Knowing” was apparently the only half of the battle Hollywood Video successfully waged, as they went bankrupt before I made it out of law school.
Of course, in order to pick the four right data points out of the “reams of data,” 7-Eleven’s CEO had to have reams of data to begin with. It’s a multiple choice test that the CEO passed, not a fill-in-the-blank test.