Data Analysis is a Communication Tool
I am the third president of GooDay, a home center business under the holding company KAHOMUSEN HOLDINGS CO., LTD. The company was once primarily engaged in the sale of electrical parts, but to keep up with the changing times, GooDay is now our main business. As the third president, I was constantly concerned with maintaining the company’s survival and growth.
When I first became president, GooDay had no digital presence, lacked an email address and website, and did not make use of IT or technology. Today, GooDay is an excellent company that has achieved growth every year and boasts a higher growth rate than its competitors. It has attracted industry attention as a cutting-edge Digital Transformation (DX) company, which has created a positive cycle with increased employee motivation and improved sales.
I believe that data-driven communication has been critical to achieving these results. Data analysis is now an indispensable tool for formulating management strategies.
Using data as a tool to create shared understanding
While my background is in liberal arts, through my experience working at a trading company I gained the ability to use data and numbers in order to make business judgments. I have studied statistical analysis and Python since we began using Tableau. I believe it is critical for leaders to have a high level of data literacy to understand the value and importance of data.
With regard to data utilization at GooDay, until 2015 the company’s POS data was stored in the business system, but it could only be aggregated using Excel and could not be analyzed from many directions, making it impossible to engage in business reform. Moreover, data presented at meetings was biased by the people in charge of individual businesses and stores, so it was rarely objective. Additionally, all the data came from documents that followed a standardized format, so it was difficult to examine the data from various angles and accurately capture overall trends.
Everything changed with the introduction of Tableau. By visualizing POS data through Tableau, we were able to see a lot more. We now have 200GB and 300 million rows of data per store and per day that is analyzed with Tableau, and we have created more than 3,000 dashboards.
It became possible to make more specific plans and proposals by looking at data from Tableau. By presenting logical explanations and proposals based on data, employees took action and the business began to undergo a transformation. We were able to put theory into practice by using data to successfully change people’s mindsets. Evidence based on numerical values made discussions clearer and easy to understand, helped prevent misunderstandings and miscommunication, and enabled work to progress smoothly. I am convinced that data is an excellent communication tool.
Data analysis success stories change employee mindsets
Despite the declining population in Japan, GooDay’s sales have continued to grow since 2015. The industry as a whole saw positive growth last year due to the effects of COVID-19, but GooDay recorded a growth rate that was even higher than the industry average.
In the past, we had no system for budgeting and didn’t know our monthly incomes and expenditures until closing the monthly report. Now we hold weekly meetings where we can see the sales status on a weekly and monthly basis, and can analyze the monthly budget. Since detailed elements are being entered, profit and loss forecasts are essentially the same as the actual results, which helps us provide a better outlook for the next period and allows us to make management decisions quickly and accurately.
For example, we are increasing sales by sharing weekly POS data across all stores. We are creating lists of products that are selling well using ABC analysis, whereas in the past we could not grasp which products were best sellers. The answers we received from field employees at the time were based on their feelings and intuition and were not backed up by objective data. However, since introducing Tableau, we can now share factual data. Data has only one set of facts, regardless of who answers.
As an example of a success story, we were able to increase sales of products that were selling well in one store by rolling them out to all stores. When you know which products are selling the best, stocking and inventory can be appropriately managed, which leads to higher sales. Moreover, we remodel our 10 stores a year, and by utilizing the detailed know-how that has been accumulated on factors such as product placement and best-selling products, we are increasing sales by 20–30 percent. We are able to identify winning patterns through data analysis. This has become a major competitive advantage in terms of management.
I believe it is fair to say that we are a data-driven organization, as our plans and initiatives based on data have increased our sales.
Developing human resources to become the best data-driven company in Japan
By introducing Tableau, those with Ambassador-level knowledge of Tableau have emerged, which is a great asset to the company. We have appointed a full-time educator to Human Resources and are conducting the GooDay Data Academy internal training program for young employees in the hopes of becoming a data-driven company that is the “best of the best in Japan” at using data. This is developing so-called data people who enjoy looking at numbers.
Even if we have financial statements and data, it won’t lead anywhere if we don’t understand it, so we are working on improving the IT literacy of our employees. IT literacy, which provides value in terms of an increase in productivity, the elimination of communication difficulties and faster and higher-quality decision making, differentiates us and gives us a competitive advantage. As a result, the number of engineers we employ has increased tenfold from two to 20, and we are now able to build and create our own cloud and applications.
Excellent human resources are essential for company growth, but it is the responsibility of management to provide learning opportunities for this growth.
As a result of introducing Tableau, employee knowledge of data has increased and their mindsets have changed. By using data as a shared language, employees who could not use the data even if they had it can now see and understand data by visualizing it. By improving data literacy, the culture of data-based decision making is growing. We achieved DX before we even realized it. Our data utilization has been recognized as a cutting-edge initiative in the industry, which has led to an increase in motivation among employees.
New business created by data
Data allows us to have a better outlook on the future, which allows us to think about the future in terms of new businesses and services. New ideas are born from data analysis. The know-how accumulated from using Tableau was used to create a new business, resulting in the launch of KAHO ENTERPRISE. This company provides services such as the discovery and resolution of management issues, hastening of management decisions, promotion of the use of the latest IT technologies, and provision of implementation support, based on the know-how on data utilization cultivated at GooDay. Until recently, it was unthinkable that a company with no website would start a business that supports the promotion of IT utilization, which has nothing to do with retail.
I believe that the role of management is to decide on a direction and lead employees in that direction. Facts are critical to being trusted as a leader. We are creating a framework using these facts for organizational management that promotes employee growth as well as company growth and expansion. Post-COVID-19, we will evaluate situations based on a variety of objective data, including population flow data, and continue to utilize data for the development of the company.
