The Cost of Ignoring Data: Why Better Business Decisions Start With Asking the Right Questions

By Jennifer Schaefer, MBA, ChFC, CLU, RHU, REBC, SHRM-SCP
Founder & CEO, JS Benefits Group | Forbes Business Council Contributor | Co-Host of Executive Leaders Radio

Businesses invest in technology, financial planning, and operational improvements to become more competitive. Yet some continue to make important decisions based on habit rather than examining the information available to them.

After 30 years in the employee benefits business, I have seen this happen repeatedly. Employers receive their annual health insurance renewal, review the proposed increase, and renew without taking the time to understand the data or evaluate changes that might improve their results.

The problem extends beyond healthcare. In any business, an established process can become so familiar that leaders stop questioning whether it remains the best approach.

Better business planning starts with a simple principle: understand the problem before deciding on the solution.

The Difference Between Having Data and Using It

Most businesses have access to more information than ever before. Financial reports, customer analytics, operational metrics, and planning software can help leaders understand performance and identify opportunities.

But collecting information is not the same as using it effectively.

A business might track revenue every month without investigating why margins are declining. A company might measure customer acquisition without evaluating which channels produce the most profitable relationships. An employer might review its health insurance premium without examining the factors driving the increase.

In each case, the headline number tells only part of the story.

Leaders need to ask what is causing the result, which assumptions underpin their current strategy, and whether different decisions could produce a better outcome.

Data becomes valuable when it changes the questions a business asks and the decisions it makes.

Benchmarking: Give the Numbers Context

One of the most important steps in strategic planning is understanding how performance compares with relevant benchmarks.

A business owner may know how much the company spends on healthcare, but that number alone does not reveal whether the spending is competitive or whether the benefits program is structured appropriately.

Employers should evaluate their costs in context, considering factors such as workforce size, industry, geographic location, plan design, and the coverage provided.

An employee benefits benchmark calculator can help employers begin evaluating their benefits costs and identifying areas that may warrant further investigation.

Benchmarking does not automatically identify savings, and comparisons must account for differences between organizations. However, it gives decision-makers a starting point for asking better questions.

The same principle applies across business operations. Revenue, expenses, customer acquisition costs, and productivity figures become more useful when leaders understand what those numbers mean relative to appropriate comparisons.

The goal is not to copy another company’s strategy. It is to understand where the business stands and determine whether an opportunity for improvement exists.

A Pennsylvania Employer: Why the Right Answer Depends on the Data

In my experience, the right solution is not always the most obvious one.

Consider a Pennsylvania employer with an aging employee population. When evaluating its healthcare arrangements, the employer needed to consider its workforce demographics and determine which approach made the most sense for its particular circumstances.

The data indicated that incorporating gap insurance into the strategy presented less risk for this employer.

That example illustrates why business decisions should reflect the specific circumstances of the organization rather than rely on a standard recommendation.

An employer’s workforce, existing coverage, financial exposure, and tolerance for risk all influence the decision. A recommendation based only on the initial premium could overlook important considerations.

The lesson is not that gap insurance is appropriate for every employer. Its suitability depends on the coverage, contractual terms, exclusions, limitations, and the employer’s specific needs.

The broader lesson is that examining the data can change the direction of a business decision.

After 30 years in employee benefits, I continue to see employers renew their health plans without thoroughly reviewing the available information or considering changes that could improve their financial position.

Sometimes the existing plan is still the right choice. But employers should reach that conclusion after evaluating their options, not simply because renewing is easier.

Evaluate Alternative Strategies Before Committing Resources

Businesses often have more than one way to address a financial or operational challenge. The difficulty is determining which option fits their objectives and risk tolerance.

Healthcare funding provides a useful example.

Fully insured, self-funded, and level-funded arrangements have different financial structures, obligations, and risks. Employers should understand those differences before deciding which approach is appropriate.

For some organizations, evaluating level-funded health plans may reveal an alternative worth considering. These arrangements combine fixed monthly payments with claims-related financial considerations, depending on the contract.

Employers evaluating alternative risk-financing arrangements, including captive strategies where appropriate, must also consider underwriting, financial commitments, governance, potential assessments, and the risks involved.

No arrangement is automatically better simply because it offers a different funding structure.

The decision should reflect the organization’s financial position, available data, contractual obligations, and tolerance for uncertainty.

This is an important principle for business planning generally: compare realistic alternatives before committing resources, and evaluate both the potential benefits and the risks.

Use Technology to Improve the Decision-Making Process

Modern analytical tools can help organizations organize information, compare scenarios, and identify patterns that deserve further investigation.

Business planning platforms can also help leaders explore different strategic approaches and examine the assumptions behind potential outcomes.

Artificial intelligence can support brainstorming, summarize information, and help structure questions for further analysis. However, AI-generated recommendations should not be treated as verified facts or substitutes for professional judgment.

The quality of any recommendation depends on the quality of the underlying information, the assumptions being used, and the ability of decision-makers to interpret the results.

Leaders should also consider data security, privacy, and the limitations of automated systems when using sensitive business information.

Technology is most useful when it helps people evaluate alternatives more clearly, not when it encourages them to accept recommendations without scrutiny.

Make Evaluation an Ongoing Habit

Strategic planning should not be limited to an annual meeting or budget cycle.

Businesses operate in changing markets. Customer expectations evolve, expenses fluctuate, and new technologies create opportunities as well as risks.

Leaders should establish a regular process for reviewing performance, challenging assumptions, and deciding whether their strategies still serve the organization.

That process can begin with a few practical steps:

1. Identify the business problem that needs attention.
2. Gather reliable information relevant to that problem.
3. Examine the assumptions behind the current approach.
4. Compare realistic alternatives and their potential risks.
5. Establish measurable criteria for evaluating the decision.
6. Review the results and adjust when the evidence supports a change.

The objective is not to change everything continually. It is to ensure that important decisions remain connected to the organization’s goals and current circumstances.

Better Decisions Begin With Better Questions

After 30 years in employee benefits, one lesson has remained consistent: employers can miss opportunities when they accept the status quo without examining the data.

The same principle applies across business planning.

Technology can make information easier to access, organize, and analyze, but it cannot eliminate the need for critical thinking. Leaders must still question assumptions, understand risks, and determine whether a proposed solution fits their organization’s needs.

The most effective businesses are not necessarily those with the most data or the most sophisticated software. They are the ones that use information to ask better questions and make deliberate decisions.

Before accepting the next renewal, approving another budget, or continuing an established process, ask whether the available evidence supports the decision.

Sometimes the data will confirm that the current approach is right. Sometimes it will reveal a better alternative.

Either way, the business is in a stronger position when the decision is informed rather than automatic.

About Jennifer Schaefer

Jennifer Schaefer, MBA, ChFC, CLU, RHU, REBC, SHRM-SCP, is the Founder and CEO of JS Benefits Group, an employee benefits consulting firm serving employers across Pennsylvania, New Jersey, Delaware, Maryland, New York, and nationwide. She is a Forbes Business Council Contributor and Co-Host of Executive Leaders Radio. With 30 years of experience in employee benefits, Jennifer advises employers on healthcare cost management, health plan design, and strategic benefits planning.