Decisions Create Systems

There are two ways to make decisions: speculation and data. 

Intuition, justified assumptions, and industry trends can often provide helpful insights when analyzing performance. 

However, they miss a key aspect for analyzing performance: what actually works.

What we think works, and what does work, are not always the same. Industry trends are not always optimal. Intuition is not always accurate. Assumptions are not always correct. 

A common critique of crypto and stablecoin is that it is based on speculation. 10 years of good returns may result in a future 20 years of good returns. It also may not. 

I would rather trust the Federal Reserve than decentralized blockchain hype. 

Many financial experts are comfortable making decisions based on speculation, with crypto or otherwise. Many are not. 

A solid wealth engine is based on data analysis and performance models. Would you rather save your money at an institution that uses data to make its decisions, or a bank that relies on speculation? Which intuitively feels safer?

The irony is that intuition often votes against itself. 

So What? 

The term “wealth magnifies character” highlights how money and wealth do not change who you are; they amplify it. If you are kind, money will amplify your kindness. If you are egotistical, money will amplify it. 

Growth has that same effect. Growth magnifies how we operate; it does not change it. If systems were efficient, growing would intensify efficiency. If decisions were based on speculation, growth would expand the number of choices made using intuition. 

The challenge is that speculation does not scale well. It is also unreliable in the long term. 

Just as a solid wealth engine uses data, ratios, and formulas to determine decisions, so too should a bank’s growth engine.

Data representing poor results can allow for better analysis and more strategic decisions than speculation representing good results. This is because even with good performance, speculation can decrease insights and learning, which could prevent repeatable or scalable success.  

The ideal is to use data representing good performance. The worst-case scenario is using speculation to represent poor performance. Representing performance with data is critical. 

Basic Steps to Data-Driven Decisions

In the world of marketing, the first lesson you have to learn is to reach the right people, in the right place, at the right time. Everything else comes second to that from a tactical perspective.

The Right People: Quantify the portfolio details. Breakdown their industry, their financial performance, their historical numbers. 

So often, we know how to do the math, we know what the data is saying, but we don’t always believe it. This opens the door to using assumptions as justifications. Trust the math. 

The Right Place: Quantify internal efficiencies and systems. What breaks? Where does it break? Why does it break?

I had a mentor once tell me that the greatest skill I could ever develop is to “speak math and math speak.” What this odd saying means is that if you can use numbers (data) to explain in words, or if you can translate your words into mathematical explanations, then you are using data to support your decisions/analysis. 

Another way of saying this: explain your math with words, and explain your words with math.

That is a lot more accurate than speculation. 

The Right Time: Quantify your connection to the bottom line and KPIs. This one seems fairly obvious; however, given the nuance and complexities of the banking space, it can often be complicated. 

Example: A frequent metric I use to analyze my own performance is a leads-to-opportunity ratio. This simple metric can provide insight into lead quality, sales cycle efficiency, and indicate the impact my work will have on closed deals. I’ve used the past 5 years of performance data for this one metric to benchmark expected performance. I then optimize and report on this particular metric to determine the decisions I make for financial marketing. 

Whether you are looking to understand your own impact or report on your team’s impact, using data and not speculation to drive decisions will empower the performance story you have to share. 

Growing your bank or b business will only magnify how you do things now. What will that growth show?

1.22.26

The Weekly Deposit, By Noah Cisneros