When you first go into business, probability is the last thing you want to think about. With ambition for a successful, prosperous future, it’s easy to spend less time thinking about what could be possible, and instead, choose to go all in to just get the ball rolling. 

This is normal, of course. If every entrepreneur spent months analysing possibilities, they’d probably miss the boat they’re trying to jump on in the first place. At the beginning of a business journey, it’s important to take risks – albeit calculated risks – to venture into the unknown, and simply see what sticks. But if you’re a business owner, the concept of probability should soon become a priority after you’ve set sail.

Into the Unknown

In generally predictable markets, business decisions can be a little like spinning a roulette table. In fact, it’s even more complicated. On a roulette table, there are 37 possible outcomes and a 2.7% probability of any one of those outcomes occurring, but in business, the outcomes are endless. Every decision made has consequences and every piece of data can be crucial in determining the best way forward. The good thing, of course, is that those outcomes can be determined. Unlike a roulette table, there are always innovative new tools with which to influence the spin of the wheel and where the ball eventually lands. 

How to Determine Probability in Business

In the business world, probability is used every day to estimate the chances of success or failure – whether that’s with a new project, investment, product launch, or anything that can affect your business’s bottom line. In other words, it’s the study of likelihood or chance through the use of collecting, analysing, and configuring useful data. The data in this case can be anything from user data, internal data, industry data trends, or data derived from social listening – each of which can be collected to formulate inferential statistics, descriptive statistics, and subsequently, probability distributions. 

Using Probability to Impact Productivity

This is a crucial part of managing a successful project or business. Not only do data-driven decisions push your business in the right direction through the collection of data, but, almost paradoxically, through the process of obtaining that data. What do we mean by this? Well, while jumping into the unknown is invigorating for the entrepreneur at the beginning of a business journey, it becomes less optimal as that business journey develops. 

Probability is about knowing that your decisions are backed up and reliable enough to be profitable. Let’s say a group of builders are given all the necessary supplies to build a beautiful castle, but they have no idea that it’s a castle they’re building. They have the know-how, but they don’t know the end goal, or whether their efforts are going to result in success. It’s clear, in this case, that productivity is going to be amplified if they understand what it is they’re working towards, and know that they’re undergoing the correct process to reach that goal. 

Engagement Will Lead to Success

According to a recent survey, engaged and productive teams can ensure 21% greater profitability than those who are disengaged. With this in mind, in order for your business to have success in the long term, probability is a crucial factor that can back your decisions, and subsequently engage your team and build their productivity. It might take time to collect the data – and calculate its reliability – but the benefits of doing so can be the difference when it comes to remaining competitive in the market, as well as keeping your team engaged and motivated for the future.