Thursday, July 21, 2016
Getting out of the Quantitative World
The world is highly quantitative – it’s all about the metrics and meeting the numbers. Everyone is counting something – number of customer complaints, number of web visits, percentage increase in sales, and the list goes on and on. With so much emphasis on the quantitative side, the qualitative side gets lost and it is the qualitative stuff that is becoming more important. One reason qualitative information gets de-emphasized is that it is difficult to measure. If we can’t measure it, then it gets ignored. This is one of the fallacies with financial reporting; things like talent, leadership and brand recognition are no-where to be found on the financial statement. But these qualitative characteristics are the real drivers of performance and they warrant more attention in today’s quantitatively obsessed world.
So a key question to ask is: How do I balance all of this hard quantitative information against sources of qualitative information? You can start by spending more time engaged in observations, conversations and other activities that allow you to capture the qualitative information. As Yogi Bearer would say – You can learn a lot by watching. It is also important to connect with a wide range of sources that provide reality checks in conjunction with all of the numbers. For example, senior level managers should spend time with employees and customers, identifying pain points and eliminating barriers. This stuff is usually not quantifiable, but it eventually impacts the bottom line.
In addition to listening to your internal sources (employees and customers), you should observe and study the outside world. This can include something as simple as attending an industry trade show to see what your competition is doing. The point in all of this is to get out of the office and capture the qualitative golden nuggets that compel your company to action. You’ll never see these things in performance reports, financial statements or other hard quantitative outputs.
One reason why qualitative is important is because it helps you learn how people react and behave when they use your products or services. Qualitative data seeks out information about the needs and desires of people in the marketplace and thus, it can be very insightful in planning and positioning your products and services. Once again, this is not easy to quantify, but it is critical to your future success.
Finally, let’s make some distinctions between quantitative and qualitative. Quantitative is highly numerical and you should use it as much as you can to put focus on what you do. However, if you lack an understanding of an issue or topic, then put emphasis on qualitative to gain insights into what is happening. Qualitative is more exploratory – doing interviews and observing things. Your focus is broad and you are not ready to conduct quantitative analysis. As you learn more, then move into the quantitative world of collecting data and applying statistics or other analytical techniques.
Because information is exploding and things are getting increasingly complex, you need to use a qualitative approach in conjunction with quantitative analysis to rank or prioritize how you solve problems. Quantitative analysis alone will not solve your problems. You need to apply physical measures to what is happening and stay alert to changes happening around you. This is why qualitative analysis should remain an important part of how you conduct overall analysis.