Hi, I’m SG and in this video, we’re going to talk about data as a convener. 65% of small businesses in America won’t make it to their 10th anniversary, and I won’t stand for that and neither can my team. So we’ve developed the five critical success factors to make sure that small businesses not just see their 10th anniversary, but go far beyond and build an enduring business. Those are, balance your head in your heart, change your focus, use data as a convener, stop being a fulcrum, and build a better toolbox. And in this video we’re going to talk about data as a convener. 

 

So we’ve been in the data business for almost 40 years, and we’ve been coaching people around their data for the last 15. And what we’ve really found the secret sauce to coaching people around their financials, is making sure that data is a place of non-judgment, which is basically the opposite of how most people use it. 

 

When we started this process, that’s what we saw. We’d show people their data in a new way, and we’d be really excited about all the questions that that creates. But what the business owners saw is I’m failing, we’re losing margin, we’re losing revenue, we’re falling apart and they’d start beating themselves up and beating up their team. And it’d end up with just criticism and cynicism and burnout. And we’re like, well, that won’t work. How do we fix this? How do we change this? And what we realized is, we can use data as the truth, because that’s what it is. All data is. is the truth. It’s not something to be judged, it just is. And that’s how you use data as a convener. So instead of using data to judge yourself and others and just beat people up, because that leads to defensiveness. People want to go into protective mode and you can’t grow from there. You can’t grow when everybody’s just pointing fingers at the other person, just hoping that they’re not the person that’s gonna get, you know, smackdown today. But instead use your data as truth, as a convener. It’s a beacon to call people into a higher conversation. A conversation around truth, around what’s really going on and being deeply curious about what’s going on. 

 

And I want to share a little story about how that works in a business. So we had a very long-term client. They always talk about how I was in pigtails when they became a client. So I was, I don’t know, three, four. I remember them coming into our office in the basement of our house. And at some point, as they were growing up and we were growing up as businesses, they came to us and they said, you know what? We’re growing, we’re growing a lot on the top line, but our bottom line is staying flat and we can’t figure it out. We just can’t do it anymore. We can’t figure it out. And so they decided to come to Mackey, and we were going to help them. And we created this dashboard of metrics. And the way we work here is we use trends and we use it, everything’s graphic, so typically up is good, down is bad. You know, we’re having good conversations in between. And what we realized when we put everything on a trend is that, yep, revenue was just going like this and profit flat, just flat. But then what we also looked at was margin. So their gross margin was, it was just going, and it like, it was so subtle that on the P and L’s that they were looking at every month, you couldn’t tell. It was just a little bit every month, a little bit, a little bit a little, bit every month. And so until we put it in a picture, nobody could see it. And instead of getting defensive, instead of getting angry, this owner didn’t say, oh, I’m going to talk to my production manager and he’s going to figure out why, who’s, who’s messing with my product and dah, dah, dah, dah, dah. I mean, there’s a pretty natural progression of anger and, like, judgment that you could think coming out of this margin decline. Instead, he was like, huh, I wonder why this is? Like, what has changed because margin was, was rocking and then it just started slowly declining. 

 

And his team and our Mackey team started looking at all the ways that margin is made in their business. And what we realized is about three years prior, they had made an investment in new equipment. And the new equipment was helping them with their huge leap in revenue. They could produce so much more but the new equipment wasn’t calibrated properly. So it was cooking the product down a  little too much every time and they charged for and packaged their product by the pound. So a little bit, a little bit less water in each piece of package meant their  margins were just falling, falling, falling. And it was that simple. All they had to do was tweak the temperatures to get that water back up in their product. And all of a sudden margin was corrected. 

 

Now, if that owner had decided to take  that data and judge it and hold somebody accountable to it to make it right, maybe you would have just fired the wrong person and things still would have happened the way it was happening. But instead he just asked, huh, I wonder why? And it made all the difference. 

 

And that’s how you use data as a convener. It’s that simple. So I hope you liked this little lesson in using data as a convener. I hope that as we come into this planning season, you think of ways to bring your team in, use your data as a beacon, to increase your conversations around growth and strategy  and all those good things.

 

If you like this video, please make sure to Comment, Like, Share, and I’ll see you next time.