How the use of analytics and trust in internal data helps to improve management and avoid strategic mistakes

The efficiency and stability of a business largely depend on the level of organization and competent management of the company's activities. The coherence of the enterprise functioning as a single mechanism is the most important factor determining its success.

The key role in uniting all processes in the company and their effective coordination belongs to the manager responsible for the overall organization of work. It is he who is able to adjust the interaction of all participants of the production process in such a way as to achieve maximum results. For this purpose, the manager needs to have access to a wide range of information, including analytical data on current activities, economic indicators and the results of each division. 

In this matter, the economic department, which provides both regular reports and operational information, becomes an indispensable assistant. Data can be expressed in natural units or in monetary equivalent - the choice of format depends on the situation and requests of the manager.

In practice, however, there are cases when a manager ignores or distrusts the information provided, believing that the indicators do not meet his expectations. Sometimes he prefers to rely on the data of competitors or other manufacturers, not taking into account that indicators, for example, cost of production, may differ significantly between enterprises. If one plant has a cost of production of $3, but your company's reports show $5, this does not necessarily indicate that the economists' calculations are incorrect. 

The need for proper economic calculation

Cost of production depends on many factors such as cost structure, materials used, technology and features of production organization, and direct comparison may not be correct. Trusting internal data and interpreting it correctly is the key to good management decisions and business stability.

One of the serious mistakes in management is when a manager ignores the information provided by his own company's specialists only on the basis of a subjective opinion that “it can't be so”. Such an attitude towards internal data can turn into significant problems in the future.

In another enterprise, where production is properly organized, a manager can achieve impressive results by strictly controlling all costs, expenses and losses. 

However, trying to learn from the experience of others, based only on external information, without in-depth analysis of one's own processes, creates a false sense of well-being for the manager. This approach is often accompanied by a lack of attention to the key stages of a company's operations and an underestimation of the work of accounting and economists, who rely on accurate data rather than assumptions or emotions.

Of course, it is important to critically evaluate the information provided, as errors, misrepresentations or misleading data can occur for a variety of reasons. However, a complete refusal to trust internal specialists deprives the manager of an objective picture of the state of the company. Accountants record each operation in documents, and economists work with specific indicators, and their work is the foundation for making competent decisions.

A manager needs to find a balance between a critical approach and trust in his team to avoid illusions and manage the company based on real data.

Only by requesting further clarification and detailing of individual indicators can the manager verify the validity of the data provided. If discrepancies are identified in the process, it is important to establish their causes, identify the weak links in the system where the failure occurred, and take measures to prevent similar situations in the future. This approach helps to gradually improve the quality of reports and analyses, building management confidence in them.

Having mastered the skills of working with the information provided by the economic unit, the manager begins to form his own requirements to the content, format and frequency of the data provided. Constant use of such information for analysis and decision-making not only increases the efficiency of management, but also makes it possible to make necessary corrections promptly. This process creates the basis for a more informed and efficient management of the enterprise.

Conclusion

For successful business management, the manager needs not only to analyze the information provided by internal specialists, but also to build a culture of trust and interaction. 

The ability to ask the right questions, identify weak links and take action to correct problems creates the conditions for continuous improvement. Using data as a decision-making tool can strengthen process control, improve strategic planning, and drive sustainable results. Effective analytics becomes a key factor that unites all elements of the enterprise into a single, harmoniously working mechanism.

Read also our material Budget for the enterprise.