How do you measure the value of learning from your past?
This simple question is actually very hard to answer – and yet I find myself asking it because of an ROI calculator (of all things!) that I’ve been working on for GRAX.
What’s the connection, you ask? At GRAX we help companies adapt faster by learning from changes in their data over time. But forget about GRAX for a second… learning from your past is a fundamental law of the human condition. We all want to improve ourselves over time, and we always try to spot patterns that help us get there in every experience that we have.
The ROI of learning from your past, depends on your attention to detail, your ability to spot patterns and your ability to act on those patterns:
ROI = Attention to detail X pattern spotting X actionability
Another way to put it is that if you had a perfect record of every single change over time AND combined that with perfect visibility into all patterns emerging from those changes AND had the ability to act on everything you saw, you would be omnipotent. Your ROI would be LIMITLESS.
That is, of course, unrealistic. After all, we are flawed beings, with an imperfect memory, with limited analytical capacity and limited impact we can have on the world.
When we come together and form organizations, we amplify our individual abilities, but we are still limited in what we can do:
- Attention to detail: our businesses generate a TON of data, but we do not always capture the full history of all changes in that data over time. When we do, we can better meet security/compliance needs and we create rich datasets imbued with information about the velocity of where our business is heading. If we look at compliance alone, IBM estimates that the average cost of a data breach is $150 per record… For a company with 200,000 records, that cost is $30M! The ability to know every detail of what happened to each datum over time is an invaluable part to tracing and mitigating most security issues. It’s also the reason we created GRAX Time Machine ($)
- Pattern spotting: humans are limited by their mental capacity to spot complex patterns over time but organizations are often limited by the data siloes they create. CRM data lives in one place, ERP in another, e-commerce in a third… this creates arbitrary barriers to pattern spotting by compromising data quality and is the reason we create data warehouses with cleansed master data records. According to Gartner, data quality issues alone create costs averaging $15M per company, and we already see companies creating and analyzing Digital Chains of Custody for their data in order to grow. It’s also the reason we created GRAX Enrich. ($$)
- Actionability: when we spot a pattern, how do we turn it into something actionable for our business? This is probably both the most nebulous and most valuable ROI category since it means so many different things to so many different people. One organization may be able to take action on cross-selling opportunities it spots across globally-dispersed teams, while another might use patterns in historical engine data to offset $63M in revenue less due to flight delays. Since each company is a snowflake, and the upside is so highly variable – could you conceivably generate 5%-10% in topline revenue if you turn historical data patterns into action? I believe you absolutely could.
At the end of the day, the ROI of learning from your past, whether you are an individual or a business, will depend on what you decide to do with it. I know that sounds like a highly philosophical answer, but it’s the truth.
One person can be a perpetual student of life, trying to always learn something, being socially-aware, hyper-critical, always listening for something useful that can help them become better… and always trying to take action on what they learn. Another person can go through life ignoring every catalyst they encounter, remembering little to nothing of the past, never reflecting or building wisdom, with an utter lack of desire to improve themselves or the world around them.
Of course those two examples are at either end of the spectrum, and most individuals and companies will likely fall somewhere in between. The key is to continually keep improving… incremental movement in a positive direction adds up to exponential impact over time.
What’s your ROI of learning from the past?