If you put one foot on a block of ice and one foot on fire your average temperature should be just right.
This silly analogy speaks to the problem with data (especially averages). Without comparison, contrast, and context the performance data about your business tends to lack meaning or it can even be misleading.
Unfortunately, you can no longer afford to not know everything about how your business is operating and how to maximize growth.
The good news is there are many powerful analytical tools to help you understand your data—like Domo, Tableau, and my favorite, Phocus. But the latest analytical tools will be of little use if you fail to see your data through a growth mindset.
In her book, Mindset, Carol S. Dweck, explains the concept of fixed versus growth mindset. Here are a few examples:
1. Stick with what’s known vs embrace change
2. Our failures define who we are vs our failures are just temporary setbacks
3. Intelligence and talent are fixed vs Intelligence and talent can be developed
4. Putting forth effort is worthless vs effort is the path to mastery
5. See the success of others as a threat vs views other’s success as a source of inspiration
Just Google fixed vs growth mindset and you’ll see all sorts of charts, quizzes, and what not to help you learn more about the idea and about your mindset. And definitely read the book.
An easy way to avoid seeing your date through a fixed mindset is to apply the 3 Cs. This simple formula will ensure your data reveal the information you need to grow your business:
Comparison + Contrast + Context = Clarity
Together comparison, contrast, and context have the power to light up the universe. But apart they do little to reveal what is unseen. Let’s examine each of them in their own context and see why.
Compare what’s similar
A comparison is to look for similarities.
President Theodore Roosevelt said, “comparison is the thief of joy”. What he meant is, rarely are comparisons fair. Rarely do we compare “apple to apples”. In fact, the opposite is true. Typically when we compare ourselves to others, we compare our worst to their best. And when comparing data, we tend to value the familiar over new information.
Contrast to show the difference
To contrast something is to show the difference. In investing, diversity is mixing different asset classes that act differently during different market cycles to manage risk. This is an example where contrast is essential. On the other hand, if you want to accelerate growth, choose comparison over contrast to combine similar investments in a concentrated fashion.
Combined comparison and contrast with context for true clarity
If data is king, then context is god (figuratively speaking of course). Context is the circumstances that form the setting in which your data can be fully understood and assessed. Context analysis is a method of analyzing the environment in which a business exists. A good example is called SWOT analysis which stands for strengthens, weaknesses, opportunities and threats, and is incomplete without comparing and contrasting key data.
The bottom line is, your understanding of how your business is running and how to grow is the difference between success and failure. Without the essential data about your business, you are truly lost.
So if find yourself adrift in a sea of data with no sense of direction. Just remember to align the lenses of comparison, contrast, and context, and set your course for greater understanding and serious growth.
And if by chance, you happen to try the fire and ice experiment, I’d love to hear the results.