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The science fiction writer Robert A. Heinlein once wrote “you pilot always into an unknown future; facts are your single clue.”
In a time of government shutdowns, AI slop, and post-truth narratives, facts can be hard to find. Nonetheless, as companies develop strategies, there are guideposts for triangulating your position and setting direction.
Government data have long been an important source for business planners who use information like unemployment numbers to inform business forecasts. But faith in government data has been shaken by the government shutdown and the president’s firing of the Bureau of Labor Statistics commissioner after a disappointing hiring report.
Companies looking for facts for planning, outside of government data, can find it in three places: private sources, academic sources, and internal data.
Labor statistics are a good example of how the private sector also offers data about the economy. For example, payroll company ADP Inc. produces its own ADP® Employment Report, which drills down into trends by business size and industry type.
Other private companies do research on their sectors. For example, in October Blackhawk Network released its annual holiday report based on a survey of shoppers. It found they are worried about rising prices and are planning to buy more gift cards.
Another data source is public companies’ SEC reporting. One of my favorite examples is from the 2008 Financial Crisis. Walmart published an 8-K in February 2008, that offered clues about the economy. “Gift card redemptions were below expectations, and customers appear to be holding gift cards longer and using them more often for food and consumables rather than discretionary purchases,” Walmart reported.
Earnings reports, sales reports, and industry analyst reports can all offer facts.
The second major source of data is academic research. Efforts like the University of Michigan’s Surveys of Consumers offer data on confidence and expectations. The ADP report mentioned above is compiled in conjunction with the Stanford Digital Economy Lab.
When looking for facts from third parties, companies need to figure out how to make sure they are getting useful information. For private data, what your competitors are releasing is the most obvious example. You want to look at companies that might reveal something relevant to your business.
As an example, while gift-card information might reveal shoppers’ general mood, it does not mean that banks should set up gift card malls in their lobbies. But this information could prompt the development of new savings products.
With academic data, companies can research the researchers and find professors and schools studying things relevant to their industries. Academics specialize in all kinds of areas, so a wealth of data might exist around whatever niche is important to your company.
It is worth doing a tabletop exercise with internal teams to ask what information would help them do their jobs better, and how they would know if the information was reliable.
That leads to the third source of useful information for company planning: internal data.
Of course, companies already use internal data for planning, but they need to do next-level analysis on the data they have to uncover new insights. While artificial intelligence often comes up in this regard, it is still possible to do good analysis and generate insights from a spreadsheet.
In a world that seems increasingly chaotic, it is still possible to develop coherent plans for the future. It just requires more information than ever before. That information is out there if you know where to look.
—Ben Jackson bjackson@ipa.org
