One of the fantastic things about our country is a Kiwi belief within many of us that we can succeed. This is borne out statistically by the fact that so many Kiwis decide each year to take their idea and do just that: establish a company, focus on their passion and go about trying to turn it into reality.

And there are some great successes in this space. People like Rod Drury (Xero), Ian McCrae (Orion Health), Sam Morgan (Trade Me), Ian Taylor (Animation Research Ltd) and many others are poster boys for successful innovation and turning concepts into reality.

Unfortunately, we’re also somewhat world-leading in the number of businesses that fail. There are obviously many reasons for this, not least of which is the fact that it’s very easy to form a company in New Zealand, so often people do so before deciding not to follow through, skewing the results a little. However, that’s only part of the story.

The fact is, many businesses in New Zealand fail every year as a direct or indirect result of a simple lack of understanding of themselves. Yes, you read that right, ‘themselves’. It’s poor decision-making, often as a direct result of the lack of understanding of who they are, what they do, and how well they’re doing it. Collectively, and rather loosely, that collection, understanding, and analysis of primarily internal information is called business intelligence and is a fundamental part of any business. Or rather, it should be.

Unfortunately a worryingly significant number of organisations skip over that step, assume everything’s all good and just carry on; whereas if they spent a little time and money navel-gazing based on good sound information, they could tweak their plans to the extent of the difference between success and failure.

Business intelligence isn’t a new science. The term itself was coined in 1958 by Hans Luhn, a researcher for IBM. However the base concepts had been in place for many years before that (albeit without the tools we now enjoy that make the job easier) and as a subset of accounting.

Given the close link between intelligence and success, one could certainly mount a fairly robust argument that businesses not engaging in this, at least at a minor level, are planning to fail, and that company directors who don’t insist on at least basic analysis are potentially failing their statutory obligations.

What’s really worrying, however, is that it’s not just small businesses that are failing to take the time to ascertain the information needed for good decision-making. Gartner expects that more than 35% of the top 5000 global companies will not make the insightful decisions required to bring about significant changes in their business and markets.

I’d hazard a guess that this number is higher in New Zealand, which is somewhat disappointing for a country built on innovation and technological advancement.

So, what’s the answer? The same as many other answers to questions related to the success of SMEs. Small business owners need to ensure they have the right information at hand and are making decisions based on sound information.

And, I’m sure if you asked the innovators listed above whether this featured in their success, the answer would be unanimous.

Innovation is hard work, and an ongoing and serious reliance on business intelligence and analysis of information, both internal and external, should never be considered optional if we’re serious about success.