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If you know me, you'll know that I'm a big proponent of data-driven decision making. Undoubtedly, there is a certain level of know-how that experience can give you. But, when it comes down to making a decision based on data or based solely on a hunch, I would go with the data every single time. But, as it turns out, that might not be enough. On the May 23nd episode of my Lykken on Lending podcast, we interviewed Allan Weiss of Weiss Residential Research, and it got me thinking a bit differently about data.
In his previous company, Allan had developed predictive technology for estimating home values down to the zip code level. However, he discovered that many homes within the same zip code would be moving in opposite directions. In his new venture, he's gone all the way down to the level of each individual home. How does he do this? By leveraging the power of modern computing, or "big data" as it is often called. You see, the problem isn't that we use data to make decisions—the problem is often that our sample is just too small.
Think about how you make decisions. What data to you use? Maybe it's a few hundred contacts on a list, and you're using that to judge how to interact with someone new. Maybe it's a few thousand transactions in a database, and you're using that to determine how the next transaction might go. Of course, it's better than nothing, but your small data sets may ending up being useless if the next thing you encounter is completely new. The only way to be sure about how to progress is to capture, not just a small sample, but the entire population. Look into harnessing the power of "big data." The more information you have to make your decisions, the better off you will be.
David Lykken, a 43-year veteran of the mortgage industry, is president of Transformational Mortgage Solutions (TMS), a management consulting firm that provides transformative business strategies to owners and “C-Level” executives via consulting, executive coaching and various communications strategies. He is a frequent guest on FOX Business News and hosts his own weekly podcast called “Lykken On Lending” heard Monday’s at 1:00 p.m. ET at LykkenOnLending.com. David’s phone number is (512) 759-0999 and his e-mail is [email protected].