Skip to main content

The Power of Lean Data

Original Content Publication Date: 12/29/2018

Summary

Nonprofit organizations or social entrepreneurs may have great difficulty in learning more about their customers and in measuring their impact. Lean data is data that is useful, gathered quickly, and is low cost. Lean data can close the gap between those seeking to do good and their customers. This form of data can also help to make organizations accountable to its users (downward accountability) instead of only being accountable to investors (upward accountability). 

In order to be effective, lean data needs to be five things. These can easily be remembered with the acronym BUILD:
  • Bottom-up. It nurtures the habit of listening to customers in order to provide actionable insight on their needs and interests.
  • Useful. It yields data that is of sufficient quality to support decision-making.
  • Iterative. It allows for learning, adaptation, and replication.
  • Light-touch. It uses low-cost tools and technologies that require a minimal investment of time and money.
  • Dynamic. It enables rapid data collection within a fast-changing environment.
Two things have made this kind of data collection possible: The widespread use of mobile phones and the increasing availability of customer feedback tools. 

The lean data process developed by Acumen, a nonprofit organization that promotes innovative ways to alleviate poverty, is a five-step process that can be easily learned. Once a team has been taught to use this process, they often do not need any help to replicate or adapt it to other circumstances and/or problems they face. 

  1. Impact Question - Establish what you hope to discover through your lean data project.
  2. Enabling Technology/Enabling Instrument - Determine which instruments/technology can help you communicate with your customers and effectively gather information.
  3. Execution - Devise and implement a plan that uses your enabling technology and instrument to gather data. Consider issues such as how long it will take, cost, and existing customer contact points that can be used.
  4. Learning - Use the data you gather to arrive at answers to your impact question.
  5. Action - Decide on steps to take in response to the results of your project.
In testing their process, Acumen has discovered four key lessons they have learned:
  • The collection of meaningful data can change the attitude of an organization toward measurement
  • Lean data can help close the accountability gap by connecting businesses with customers
  • Entrepreneurs can conduct lean data projects quickly and at low cost
  • It doesn't always run smoothly and the questions asked, or format used, can impact the accuracy of data collected

Key Points

  • Lean data is a fast and cost-effective way to measure impact
  • Lean data can help close the gap between businesses and customers

Discussion Questions

  1. How might the availability of lean data influence the decisions of an investor?
  2. What could be the possible benefits of making a company accountable to its end user?
  3. What possible drawbacks are there to the use of lean data?