Peerview Data Insights

One of the main reasons companies use our strategic analysis & benchmarking tool is to get better insights out of the data they already collect so they can address pain points  — high turnover, cash flow issues, an un-engaging brand, etc.

What's interesting is that in a lot of cases the root cause of the problem isn't what they thought it would be or where they thought it would be.

How is that possible?

Even though we assign roles and responsibilities by department or functional area, nothing in business is completely isolated. Everything is linked and interconnected in such a way that all these individual actions form a giant kinematic chain in which the "movement" of one affects the "movement" of another, sometimes something that's much further down the line.

This is why a marketing problem isn't always a marketing problem, but can be a company culture problem instead. 

Or a sales problem can be a finance problem.

(The same thing is true for people, which is why knee pain is often traced back to foot problems and limited hip mobility can make your back hurt.)

How do you know when that's the case?

You don't.

That's why it's important to analyze your performance data. 

Here's an example:

One of our clients came to us because they were having turnover issues. Because we provide both "scoreboard" metrics and "differential" metrics, they were able to rule out the obvious causes: uncompetitive salaries and benefits, limited opportunities for advancement, unrealistic productivity demand, bad management, etc.

What they eventually realized was they actually had a "grass is greener" problem — their employees were leaving because they didn't realize how well the company was treating them and how strongly it was performing — which they solved by sharing their Peerview Data analysis so everyone internally could see just how green the grass really was.

The result?

Over the next two years, they cut their turnover rate in half.

Surprised?

One thing we've learned working with small businesses over the years is that most of them view marketing & advertising as an expense, not an investment.

Most of their money goes to what are increasingly just "price-of-entry" touch points:

• Web sites
• Blogs
• Social Media accounts
• Promotional items
• Trade shows & conferences

Are they missing an opportunity?

What are your employees really worth?

For a lot of us, when we're happy with them they're priceless; when we're not, they're worthless.

Unfortunately, that kind of gut-level assessment isn't very objective.

That's why we analyzed performance data from over 1000 professional services companies (law firms, ad agencies, architects, engineers, accountants, etc.) to see if there was a better benchmark for productivity.

Our findings?

For most companies, a good target range is between $150k to $200k in revenue-per-employee.

That's not to say that there weren't industry differences — law firms, for example, average a bit more than accountants — or regional differences — coastal cities were higher than Midwestern suburbs  — but most fell into that range.

Why?

Do followers and connections make a difference?

Maybe.

After analyzing data from about 2300 companies (mostly professional and financial services, but also retail, manufacturing and healthcare) we noticed an interesting link between fast-growing companies and the social media footprints of the owners and executives behind them, particularly in terms of LinkedIN connections.

When we looked at Twitter, Facebook and company pages on LinkedIN, high-growth companies usually had a more robust presence than slow- or no-growth companies, but the difference wasn't nearly as pronounced as when we compared the # of LinkedIN connections among owners and executives: High-growth owners/executives averaged nearly 2.5 times the connections of slow or no-growth companies, 500+ vs. <200.

(We ignored Google+ — sorry, Google — and are still gathering info on Instagram.)

It's important to note that correlation is not causation, and the link didn't hold 100% of the time among the companies we sampled.

Salesforce just released its annual State of Analytics study and it's worth reading.

You can get the entire report here if you share your contact information with Salesforce, but Forbes has broken out a few of the the key findings:

• Analyzing your performance data is the key to staying competitive: "High performing enterprises are 8.2x more likely than underperformers to primarily use analytics tools to gain strategic insights."

According to Bain & Co., companies that analyze their performance data are 2X more likely to have top-quartile financial performance than companies that don't.

Given a statistic like that you'd think every company would crunch their numbers, but most don't.

Why?

The problem is in order to do this kind of analysis you need both internal and external data — industry benchmarks, competitive comparisons, historical trends, etc. — which most companies don't have.

If you can afford to cough up $$$$'s you can hire Bain & Co. to do this for you, but for most companies that's not an option. 

(FULL DISCLOSURE: we charge $999 for an industry-specific performance analysis.)

What's a small business owner, manager or executive to do?

Source: Bain & Co. 

Corporate retreat?

Company Ferrari?

Picasso for the boardroom?

If you're like the small-to-medium-sized companies cited in a just-released IDG_Enterprise survey, you'll be spending that amount over the next 12 months on data.

Surprised?