Key Data In Your Business – Lessons From Football
Given the number of clubs that enter administration, end up selling players in a fire-sale or change ownership overnight then you wouldn’t expect there to be too many lessons that small business owners could learn from football.
However, how football clubs approach young players and developing them is becoming more data driven, which is something that many small businesses could really take guidance from.
Timing & Seasonality
The football academy system is based on the age of the player at 31st August. So an under 21 team would have players available for the whole season providing they were 21 or under on 31st August. Which part of a football academy the players fall into has traditionally been age driven.
What this fails to take into account is the physical development, mental readiness or level of ability to play at that age level. There will be some players who are ready early and others ready later.
Premier League clubs are now looking at data to determine where and how each player is developed.
Now, apply this to a small business. How many times do you do something in business because it is driven by the time it happens rather than the data to support it? Think about this…
- A seasonal business applies for lending in November because that is the time it needs cash the most. Is it the best time to borrow? No. The best time would be when the financial data is looking the best, probably high season when the P&L is glowing. It would be better to apply for borrowing and put it on ice, rather than wait until you desperately need it
- You send out an email update to your client base every Tuesday morning. Why? Probably because that is the time you always sent your email update out. The data might suggest that readership of your email is better at one time than another, have you ever asked the recipient when they would prefer the update from you?
These type of data driven activities are relatively simple. For email marketing then there is plenty of low price software which will handle this for you. For raising finance, then it is about being prepared. It is basic use of data to maximise success.
The Speed of Development
Football clubs are starting to share data about development speed. For the clubs this is about how quickly a young footballer progresses. Historically, there would be stages of development benchmarked against typical development for all players that age.
What this does is show some players to be developing slower, or not making the grade, and others developing quicker and appearing to be the next Pele or Messi. The fact is that the fast developing player may be lagging because they could be doing more and the under developing player actually being further ahead than they should be.
It is about potential, the individuals speed of development. It is being data driven and should see time being given to players to develop and achieve potential even if it takes a little longer, at the same time the fast developing player is pushed on to achieve even more.
In business this data driven approach can be applied in several areas. Think of this;
- Instead of looking at financial performance and questioning what your business is doing then dig deeper into the data that drives those figures. Don’t look at your P&L and question it, look at the KPIs, look at the underlying activities, look at the people, their time and responsibilities. It is about moving away from the headline target and looking at the data underneath it as the success or failure is hidden in what you change here, it is within the key data
- Credit terms. Cashflow is always near the top of any business’s agenda. Why therefore, do so many businesses operate on standard credit terms. Look at the data of your customer. If the data suggests they could be a bad risk then tighten your terms or vice-versa
There are plenty of standard actions that companies take on a daily basis without considering the data behind them.
There are lessons that small companies could learn from football. A more detailed article on data within the Premier League is on the BBC site, give it a look.
As always, if you have any comments about this post then please add them above or contact Lime Consultancy direct.
By Dave Farmer
Dave Farmer is founder of the award winning commercial lending specialist, Lime Consultancy. Lime work with companies across London & the South, providing guidance on business finance and commercial lending.