One of the biggest risks in business isn’t making poor decisions.
It’s making good decisions based on assumptions that have never been challenged.
Every Managing Director develops those assumptions over time. You spend years building a business, working with customers, supporting your team and understanding how the organisation operates. Naturally, you build a picture of what’s working well and where your biggest opportunities lie.
Most of the time, those assumptions are right.
Sometimes they aren’t.
And unless you have the visibility to challenge them, you may never know.
One Conversation I’ll Never Forget
A few years ago, I worked with a manufacturing business that operated across four distinct business units.
During one of our first conversations, the Managing Director explained which part of the business generated the highest profit.
It wasn’t guesswork.
It was based on years of experience, discussions with the team and the financial information available to him.
It was also wrong.
Not because anyone had misunderstood the business or hidden information, but because nobody had ever been able to compare project profitability consistently across all four business units.
The business could see the financial results.
What it couldn’t see was what was driving those results.
Looking Beyond The Numbers
The objective wasn’t to introduce another reporting tool.
The business already had an ERP system containing the information it needed.
Each week, project data was exported from the ERP system and brought together into a business intelligence dashboard. Rather than producing pages of reports, the dashboard presented a consistent view of completed project profitability across every business unit.
The conversations quickly changed.
Instead of asking whether the business had made money, the team started asking why one project delivered a stronger margin than another.
Why were similar jobs producing different results?
Why did some business units consistently outperform others?
Why were certain quotations proving more accurate than others?
Those questions became far more valuable than simply reviewing the financial numbers.
Challenging Long-Held Assumptions
One of the first discoveries surprised everyone.
The business unit that had always been considered the strongest performer turned out to be the weakest in terms of gross margin.
Nothing had gone wrong.
The business simply hadn’t had a consistent way of comparing profitability across every completed project.
Once that visibility existed, assumptions were replaced with evidence.
Rather than relying on instinct, the team could investigate what was happening, understand why some projects performed better than others and identify opportunities to improve future performance.
Democratising The Data
One comment from the Managing Director has stayed with me ever since.
“We democratised the data.”
I thought that summed the project up perfectly.
The information was no longer sitting within Finance or being reviewed only by senior management.
Project managers could see it.
Commercial teams could see it.
Leadership could see it.
Everyone was working from the same information.
That didn’t just change reporting.
It changed behaviour.
Teams started asking better questions because they could see the evidence for themselves.
Lessons from completed projects influenced future quotations.
Commercial decisions became more objective.
Project reviews became opportunities to learn rather than simply explain financial performance.
Better Information. Better Decisions.
One of the biggest misconceptions about business intelligence is that dashboards improve performance.
They don’t.
People improve performance.
What better visibility does is give people the confidence to challenge assumptions, understand what has happened and make better decisions going forward.
That’s exactly what happened here.
The business didn’t suddenly employ different people.
It didn’t change its products.
It didn’t transform its operating model.
It simply gave its people better information.
The Result
The impact was significant.
Over a period of just 17 weeks, gross margin increased from 43% to 49%.
That represented an annualised improvement of approximately £250,000 in profit.
Not because people worked harder.
Not because more sales were generated.
But because the business understood its performance more clearly, learned from completed projects and applied those lessons to future work.
Seeing The Bigger Picture
This is exactly what we’ve explored throughout our recent blog series.
In Why SME Leaders Can’t See The Whole Picture, we discussed why many organisations struggle to connect information across the business.
In The Missing Piece Between Finance, Operations and Supply Chain, we explored how different departments naturally view performance through different lenses.
And in Why Good Decisions Can Still Create Bad Outcomes, we looked at how sensible decisions can still produce disappointing results when they’re made without understanding the wider business impact.
This manufacturing business demonstrated what happens when those ideas come together.
Better visibility challenged assumptions.
Shared information changed behaviour.
Better decisions improved commercial performance.
That’s what seeing the bigger picture really means.
Can You See The Bigger Picture?
Most businesses already have the information they need.
The challenge isn’t collecting more data.
It’s helping the right people see the right information, ask better questions and make more informed decisions.
If you’d like to understand how greater visibility could help your business challenge assumptions and improve performance, explore our See The Whole Picture framework.