Executives, Decision-Makers, and Colleagues,
Numbers matter in business. But the question is: Which numbers are you looking at?
Many people look at aggregate numbers and make decisions based on them. That can be a mistake.
Take inflation as an example. The CPI index gives an overall picture, but it does not tell the complete story for every business.
Different industries experience inflation differently. Different customer groups experience inflation differently.
If a company uses only the overall inflation number to make business decisions, it can lead to wrong conclusions.
The right approach is to go to the ground level.
Understand what is happening in your own segment. What is happening to your customers? What is happening to your costs? What is changing in your industry?
That is the level at which business decisions must be made.
For example, lower-income consumers may see their wages increase.
But the more important question is: What is left in their pocket after expenditure?
That determines their ability to spend. Averages can hide this reality.
Businesses must understand the actual conditions faced by their customers, not just look at broad numbers.
The same applies to costs. Leaders must look at the components
Understand what is increasing. Understand what is not increasing. Understand what is driving the change.
The key is segmentation. Do not look only at the overall number. Break it down and understand each part.
The job of a CEO is to understand reality as it exists on the ground.
Do not manage from averages. Go deeper, understand your segment. Make decisions based on what is actually happening.
Best,
Ram Charan
