The first habit I introduced in this series, The 4 Habits of Modestly Successful Entrepreneurs, was selling time for money – a habit that structurally caps the amount of revenue your business can generate.  That was followed by the habit of working too hard – which limits efficiency and the longevity of your business.  These two habits, along with the other 2 habits in the series, are the types of behaviors that keep business success at a modest level.  Implementing business strategies to break these habits can propel entrepreneurs to phenomenal success.

Our third habit is explained below.  Don’t forget to watch the video for a more in depth discussion on relying too much on data.

Modest Success Habit #3 – Being Overly Dependent on Data

Most of us have heard the cliché “analysis paralysis.”  Just because something is cliché doesn’t mean it is not worthy of our attention.  While it is absolutely necessary to ensure that an adequate amount of homework and research has been done before launching a business and continued industry and customer intelligence is critical, it is possible to be overly dependent upon data.

An entrepreneur moves from being well researched to overly dependent once they believe the data will give them the right answer they are seeking.

This habit is most prevalent in those entrepreneurs who were high achievers in school.  The A, Dean’s List, and Honor Roll students mastered the science of getting the A – the once correct answer that could be derived from the information provided.  Unfortunately, business doesn’t work that way.

Data is only one input

While data is important, it is merely one input in the equation of what should be done to be successful.  Some of the other factors to consider are:

• Your experience and skill level
• Your passion
• Your gut
• Your risk tolerance
• Your personal preference

Since no two entrepreneurs (or their companies) are exactly alike, it is not appropriate for them to respond in exactly the same manner to the market conditions they face.  What works for one business may not work for another.

Pitfalls of over-dependence on data

• Analysis paralysis – when you hold a believe that data will provide the right answer, you have a tendency to keep gathering and analyzing data, unable to act until the “right” answer emerges

• False precision – the business world is not a laboratory and therefore, the data you can gather is very subjective.  Assuming a single, definitive interpretation of the data can lead to decisions that are based not upon as much fact as you intend

• Discount the human element – data is turned into information by interpretation. Information is turned into knowledge by judgment.  Knowledge translates to action through the wisdom of the decision maker.  The judgment and wisdom or the decision-maker are rendered useless when the data is given supreme importance

Solutions for overcoming Over-dependence on data

• Learn to experiment - sometimes you just have to test things out to see what kind of results you will get.  Many of the successful entrepreneurs I know are “Ready, Fire, Aim” types.  They are more inclined to act on what they know, measure the results, and set the course based upon what yielded the best results.

• Be willing to take risks – no one ever becomes phenomenally successful by following the well-worn path.  Developing a habit of seeking an alternative explanation of the data that could suggest a different path than the one taken be the competition will allow you to break away from modest levels of success.

• Listen to your gut – you didn’t get in your business because you don’t know anything about it.  Your intuition is a powerful tool that can assimilate a tremendous amount of information for you subconsciously.  Learning to develop and trust your intuition will serve you well.  The more successful you become, the more important it is to be able to make good judgment calls.

It is important to remember that data doesn’t have the answers to the questions that will lead you to phenomenal business success. You do.

The fourth habit is coming soon.