Is it fact or is it opinion?

Imagine a market stallholder who pitches up in a different town each day to sell an array of variously flavoured olives. She has a reliable supplier for her goods, a stream of regular customers and sometimes manages to generate new interest from passers-by.

Then, one day, a bigger pitch becomes available in one of the towns she frequents. It’s double the size of her existing pitch, offering our olive lady a great opportunity to expand the business.

Now, does she simply accept her previously held opinion that the olive market is thriving, order greater quantities from her olive supplier and carry on doing exactly what she has done so far? Well, the problem with that is that olives can be a bit of an acquired taste and the fact of the matter could be that her particular market for olive sales is already at capacity.

It seems as though she will continue to sell the same amount of olives to her regular customers, while having to pay a higher rate for her pitch and probably ending up with a significant amount of stock left over at the end of the day. A path towards ruin looms ahead.

To manage the opportunity, the stallholder needs to look at all the facts, taking the time out to find out what other offering her customers might like, along with sourcing potential new suppliers and closely examining costs and profitability.

 

This is a great example of the reason business decisions should be based on facts. Opinions can often skew our view of the truth and lead to poor decisions making. The opinions are often held because they reinforce the decisions we’ve made. It can be difficult to take off the blinkers and see things from the factual viewpoint. Before making any business decision it’s important to take time to find out the facts. Our opinions must then be checked against the facts, before decisions can be made.

If we base decisions on opinions or part-truths we could inadvertently be measuring the wrong KPI (Key Performance Indicator) and driving the incorrect type of behaviour. This type of decision will have a knock-on affect in your organisation and it’s unlikely you will ever achieve the desired outcome.

It’s easy to skew the facts to match our opinion, but we actually need to allow the facts to shape our opinions. By looking at the facts before we make decisions or put KPIs in place, we can identify where we should really allocate our resources to get the maximum impact.

I discuss this in more detail on the Fluid Business Podcast. Listen below:

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I hope you enjoyed this post and found it thought provoking. I’d love to hear your feedback, email me at at ray@thelevelsblog.com.

Using The Levels Framework, I help business owners achieve long-term sustainable growth using strategies I used successfully for many years.

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