Don’t be Lazy with Your Data! With Dr. John Johnson on Episode #0274

John Johnson [0:00]
Hi, this is John Johnson from Edgeworth Economics and Edgeworth Analytics and you’re listening to EA Interview.

Intro [0:07]
EA interviews, Episode 274, inspiration, transformation, success stories and the Imperfect Action Round seven days a week. Join Mario Fachini for today’s Expert Authority Effect Interview.

Mario Fachini [0:21]
How important is good data? It’s very important. And it’s something you should consider in your business. If you want to be more profitable, you can’t be doing that with bad data. If you want to know who’s the right person to hire, you can’t be doing that with bad data. And that’s why I’m excited to have the CEO of Edgeworth Analytics here, author and PhD from MIT expert witness on data analysis, John Johnson, I’m going to have him up right after we thank our sponsor.

Sponsor – Free Business Book Publishing Course [0:51]
Every business needs a book, including yours, visit freebusinessbookpublishingcourse.com today to learn the seven steps to publish and promote your nonfiction lead and profit generating business book in eight weeks. Once again, that’s freebusinessbookpublishingcourse.com.

Mario Fachini [1:06]
Here he is, ladies and gentlemen, John Johnson. John, how are you feeling today?

John Johnson [1:10]
Doing great. Thanks so much, Mario. Great to be here.

Mario Fachini [1:13]
I am excited for what you have to share. Because you have a unique perspective and expertise on data analysis. And I know some people talk about data, like, Oh, it’s important this and that. And I think a lot of people realize you should have data but your level of expertise on it. I’ve never seen before, what would you say is the most important thing with data that all businesses should consider?

John Johnson [1:37]
Well, I would say that data doesn’t come ready to use, and I think it’s one of our biggest sort of mistakes people make if they think well, I have a data set, or we must have data, so I can just analyze it and go. Most of data analytics, actually, is the time spent to prepare and think about whether the data is right. I think that’s the single biggest thing you have to know before you embark on any data analysis is, is this data even usable? And what do I want to accomplish with it?

Mario Fachini [2:02]
How do you know if it’s usable?

John Johnson [2:05]
That’s a great question. I think a starting point, and I always say is that you have to sort of first really understand the question that you’re going to want to answer. And that’s going to inform whether the data can help you or not. There are certain decisions at the company decisions that you better be certain you have great data for. There’s other decisions sort of, well, we’re trying to figure out how to stock our supply shell for things that are less important, but that you still don’t want to have some kind of analysis. And so you want to know, alright, is the data I have going to inform the question, given the relative importance of the question I’m trying to answer. We can get lots of things where we can do better than just chance occurrence or better than just guessing by using data. And then there’s those decisions you really want to be certain about. And you have to think about, okay, I really need the best possible most pristine data to answer this question.

Mario Fachini [2:55]
Okay, so where do you get it from?

John Johnson [2:59]
But most people are sitting on mountains and mountains of data in their companies. There are sort of estimates from IBM that 95% of the world’s data gets created every two years. But that data is actually probably shrinking at this point in terms of being quicker. So when you have a company or a business, more often than not in the ordinary course of your business, whether it’s through your accounting systems, your HR systems, the Excel spreadsheets, you use to manage your business, you probably are sitting on a lot of the data, you need to start to understand and make the decisions you have. Other external sources and sometimes that’s useful. But I always think the starting point is well, what do you have to run your business? That’s probably where the answer to your data questions lie.

Mario Fachini [3:41]
I want to ask you about deciding how you decide between financial data, marketing data, HR data? Where would you say is a good place to start? I know, you said that depends on the question you’re asking. But there’s so much data.

John Johnson [3:59]
Yeah, like there’s always a lot of data. And I think, of course, the question informs it, but at the same time, it also could be what’s the most accessible to you? Right? Your financial data might well be that when you can get your hands wrapped around the quickest and easiest. And so maybe that’s the right place to go. I mean, there’s a combination. I think, sort of, sometimes we let the perfect be the enemy of the good enough when we’re trying to do business decisions. Obviously, data can be quite messy and can be a little bit ugly. But if we try to think about it in terms of all right, where can we get the most valuable information for our most pressing needs? I think that’s usually like I start as I think about all right, well, what’s accessible? What do you have? Where do we go from there?

Mario Fachini [4:39]
If you want to increase the company’s profits, do you think you should only rely on the financial data?

John Johnson [4:49]
No, I think that would be a pretty big oversimplification. Data does not exist in a vacuum. In other words, I’m not one of those data scientist analytics type people. It’s going to tell you what you only should think about the data and nothing but the data when you approach your problems. In fact, I think sound data analytics is shaped, is formulated by what you know about your business. And then you use the data to help confirm or reject maybe your preconceived notions, you think about it more systematically. But let’s take a simple example, if I’m dealing with hiring a new consultant for my business, or I’m trying to think about a long run strategy of sort of hiring, I care a lot more about my hiring strategy and my HR data than I do about my current profitability data. So it really depends on what the time frame is, and how you’re thinking about your business.

Mario Fachini [5:36]
Now, you’re saying you do a lot of hiring as well? How does that incorporate into the success of the company while you’re analyzing the analytics?

John Johnson [5:45]
Well when we think about sort of candidates, we’re always thinking about sort of a longer term strategy, what makes ultimately a successful employee? How can we learn based on the data we have? Who has looked successful in the past? Now, that doesn’t mean that we limit ourselves to those people, but we often think about creating profiles in terms of, oh, here are the general characteristics of someone that was successful at our company, they might have had this type of degree or this type of background, or generally this kind of experience before. And so I think at any question that you might have to answer or think about, there are data insights to be drawn as you think about that.

Mario Fachini [6:20]
If you’re a small business, what would you say they should consider versus a medium or large size business? Because I know you’ve worked with fortune businesses. And not everyone fits that bill, right? And maybe it’s not even a goal of theirs. And that’s fine. Maybe it is, but what should you be considering at the different levels, depending on where you’re at in business?

John Johnson [6:43]
So I think the biggest thing is that for a small business, you have much more limited resources, you have much more limited time, you probably have a more limited scope in terms of what you’re trying to accomplish. So I think there is about prioritization, what are the most important goals for your company that you can actually use data that you have to get your hands wrapped around? Again, we don’t have to have perfect data to have some insights. But I think sort of scaling and scoping projects effectively is a really important part of what you have to think about. What I’ve worked with really large companies, the issues are more about marrying very large data sets across multiple systems and multiple sort of departments to get to the answers. In a microcosm, you have those same types of issues with a small business, you still have HR data that’s different than pricing data that might be different than other kinds of customer data. But still, I think scoping and scaling to answer your question is the best way to make forward progress with data no matter what size your company is.

Mario Fachini [7:39]
Do you have any specific favorite softwares to track it all? or anything of that nature? I mean, if I were to say, should I use Microsoft Excel to create a spreadsheet of all the company’s important data or Google Sheets? Are you going to cringe? Because I’m even suggesting putting it into a spreadsheet to begin with?

John Johnson [8:01]
No, look, I’m pragmatic about these things, obviously, depends on the level of sophistication you’re trying to use. I think that Excel is a valuable tool and we use it all the time for different sorts of purposes. I think as you start to do more sophisticated analyses, you may need more sophisticated programming and things like that. But again, I think and again, I don’t want to sound like a broken record, but there’s a part of this that is so important, you should always use the tool that is most appropriate for the task you’re trying to do. So if you’re doing something where you could actually use Excel appropriately and sort of fit things in to get to the cleanest, simplest answer. I’m a big proponent of that. I think sort of knowing where you kind of hit the limitations maybe is a little more subtle, and is it going to be good enough or not. But in general, as again, I think that Excel is a tool that we use at our firm. I mean, we use other all sorts of other programming languages and things that are more sophisticated as well. But it really just depends on the scope and scale of what you’re trying to do. But a good Excel graph or a good Excel chart. I love this.

Mario Fachini [8:56]
Okay. It just depends on the company. It’s not one size fits all.

John Johnson [9:01]
No, definitely not. And as I said, if it’s going to prevent you from doing any data analytics stuff, we go back to the small business, you should work in the tools that you can do at least have some insights, I do think this is an area where some insight is better than none. And again, I think people sometimes are afraid of statistics, and they’re afraid of sort of, oh, all these statistical techniques. And again, what I encourage people to do is sort of at least trust your instincts that you do know your business and how to identify questions, you can always turn to someone like me to help you sort of think through all right, well, what’s the process and things like that? But at the end of the day, I don’t always try to teach people to sort of be more empowered with data, as opposed to sort of being afraid of.

Mario Fachini [9:40]
Okay. Yeah, because there’s the people out there and I used to be… still very much in a lot of ways. I like to have fun, I like to be colorful and present. I’m sure that doesn’t show up anywhere. But when I start In business, I realized you can’t just shirk all responsibility and not know the metrics on things to your point. And though that’s a personality type, because not everyone loves spreadsheets, but the people who do they swear by them. So I’ve heard people say, oh, I use Excel for everything, I use spreadsheets for everything. And other people are like spreadsheets or trash. You need to be using XYZ software, because it gives you so much more insight. But I love what you’re saying. Because it really depends if you’re doing nothing. The fact that you’re even trying to be organized is good for you. And if you’re running a multi… I can’t imagine Apple or Microsoft being like, alright, what column is it and just like tracking all their employees, staff products in different tabs. But if it works, I’ve heard stories of stuff like that, where it’s like, maybe that’s the secret, you know what I mean?

John Johnson [10:53]
You might be surprised how many big companies maybe aren’t as sophisticated with their data, as you would suspect.

Mario Fachini [10:59]
So what is it then? How do they get to be so large with just in? I know, that’s the case. I’ve had some of the owners on the show. And I’m just like, you’re doing what?

John Johnson [11:08]
Right? Look, I think that the reality is, data is a competitive advantage. It doesn’t in certain industries, it doesn’t mean it’s going to make or break you in its entirety. Right? I think that the more data we have, the more competitive industries are, the more likely it is that, you really can’t ultimately ignore data forever. But that doesn’t mean there aren’t certain ways where people might be really, almost doing a form of the data analysis in their head without actually realizing they’re doing it, they kind of well, we’ve always said, our profit margins this way or that way. Now, I’m not saying at the end of the day, that I think that that’s a long, long run strategy for success, especially as sort of, we find more and more competitors and more and more industries. But I do think that, I could sit down with a business person who’s been in business for 20 years and talk about their business and their instincts and intuition and identify, oh, so what you’re talking about is your data is showing you this, and they might not even realize that right? So some of it is as simple as just translating, and interpreting and understanding you’re actually running that you’re doing that spreadsheet in your head, you may not realize that yet, but that’s what you’re doing.

Mario Fachini [12:13]
I can relate to that, when I’m helping authors publish their business books, it’s like, well, I don’t have a system, I don’t have a process. I’m like, really, you know, to turn into chapters and actually make a book. And I’m like, really? Well, what about this? What about that? And after three or four questions, they’re like, this is my process, isn’t it? And it’s like, absolutely. Everyone’s running a script, everyone’s running a process, it’s just a matter of have you turned it into an asset, and use the data to your advantage versus just spinning your wheels with it. How do you help people see that if they don’t already?

John Johnson [12:48]
Well, I mean, that’s a lot of what we try to do. I was a professor for a few years, I was a little too social to be a professor, quite frankly, but I like to teach people. And so what I talked about empowering people with data, but we try to really talk to business owners of any size and say, well, let’s talk about what are the problems your business is facing? What are the things that are really pressing for you? And how can we translate that into a data oriented solution given the data you have? And so again, I think that when people understand that, no, I’m not coming into your business, because I know your business better than you. I’m coming into your business with a toolset that maybe I can help you to understand better, or do a better job executing on your business. And that’s really the key to good data analytics to good data consulting. We call that our data blueprint. And for every business, we can lay out a data blueprint where, what’s the key issues? What’s the type of data you have? How would you think about this? And what are some things you can do statistically, to sort of help identify whether their key performance indicators or just other metrics would help you get to an answer that might inform you in a pretty important, useful and hopefully profitable way?

Mario Fachini [13:55]
Yeah, it makes no sense when you’re just guessing when you can at least look at the metrics, whether you love them or not. When you can look at the metrics and decide it’s so much easier and more enjoyable.

John Johnson [14:06]
Yeah, I just think it also gives confidence to your decision making, right? I mean, I think as an entrepreneur, you’re always sort of guessing. And I think a lot of us in the last year, with COVID, with the constant changing economy, a lot of us have had to sort of take our best laid plans be like, whoa, we got to make some changes, because the whole world changed on us, gives me a lot of confidence as a business owner, I’m like, Okay, well, the decisions I have to make, I can support them with data. Now, I may not be right all the time. In fact, I’m not always right all the time. But the data gives me an indication, okay, this is going in a direction i think is helpful, or, oh, I need to adjust, I need to change course, that gives me more confidence to make those decisions with real time data. And I mean, real time doesn’t always mean like instantaneous. I don’t have a dashboard updating every five seconds with data. I just mean that gives me the confidence as a business leader to really make the decisions I need to and be more confident that I’m thinking about all the right issues.

Mario Fachini [15:03]
I’ve noticed that’s a big thing in it. I want everyone to be clear, the instantaneous, it’s not like you have a stock ticker for every metric going on in the business, but the real time data and I would say maybe within 30 minutes, an hour, two hours, three hours, at least within 24, I think I would count that as real time more so than even 20, 30 years ago, it seemed like a lot of data. It was like you couldn’t get the metrics with the numbers until the next month, maybe the next quarter. I mean, that’s very reactive, even if you are doing your best. But well, go ahead.

John Johnson [15:37]
I agree. No, I was just gonna say I agree. And there are certain metrics for which, you know, weekly is good enough, right. But I mean, it just depends on what you’re doing. But I completely agree, the notion of real time, I think people get a little criss crossed out, and they think, oh, my gosh, if I don’t know everything instantaneously, well, you’re probably not making instantaneous business decisions anyway. You’re thinking about things. And so real time today, what I do agree with you is historically, a week, a few days, maybe two weeks, maybe a month. But that’s still pretty real time for a lot of decisions you’d have to make.

Mario Fachini [16:11]
Yeah, and I think it’s important to point out and this just came to me, because there’s been times where I’m like, wow, whatever. And it’s like, let’s go have a fun network, do sales, help people all this stuff. And I really do love all that. And then there’s other times, I’m like, okay, especially when I launched EA Interviews, you’d appreciate this, I actually have a spreadsheet that’s 155 or 60 columns long, by now hundreds and hundreds and hundreds of guests. And it was a lot to begin with. But I was like, well, what’s the file size? Did you know? Did they show up on time? Who was the… Get Started with your name and the title of the episode. But I’m like, well, if I’m gonna track this, I can also track the file size and the upload time and the transfer to my team and all these things. And after probably a couple of weeks to a month, it just became this thing. And I’m like, scrolling scrolling, it’s like maybe I don’t need all of this. Most of it really is helpful, though, in all honesty. But then it’s like you can get so focused, it’s like, did you follow up with anyone today? Did you talk to anyone new? Did you promote the show, so that I think it’s, I do want to note that there’s this balance? Oh, like you’re saying with the real time data, if you’re up to the second with it, or the minute or the day, it’s like, if you’re spending so much time in it, don’t ignore it. But if you’re spending so much time you’re forgetting all the other stuff that’s actually driving the needle, staring at the dashboard alone isn’t going to get you new customers, or follow up with existing ones?

John Johnson [17:48]
Well, at some time, you have to do your job, right? If the only thing we’re doing is looking at what’s the latest? I mean, yes, part of my job is looking at data all day at night. I’m not talking about that. But what I mean is, if the only thing I were looking at was metrics of performance for my firm, but I’m not actually doing the work of my firm, then that becomes a problem. I mean, there have been clients I’ve had where it almost becomes like a video game for them.

Mario Fachini [18:11]
Right.

John Johnson [18:12]
And they’re not very interested in data at all. And by the end, it’s like, wow, this is great. And we can do this. And what about this? And what about this scenario? And you’re like, okay, well, in the realm of what you’re trying to accomplish, at some point, it becomes a little counterproductive, right? You what’s the phrase, you jumped the shark? Right, there can be such a thing that you might be focused on too many details and missing sort of missing the key insights. And so again, I love data. I’m a big proponent of having as much data as you can within reason. But again, I think everything has to be practically balanced against the realities of your business. If you’re not thinking with that perspective, then data becomes overwhelming. It’s not the valuable tool you need it to be, it actually can become a hindrance.

Mario Fachini [18:57]
Yeah, I was thinking of downloads for the show, cuz you have a dashboard with all the stats when people are downloading, it’s like, you could stare at that for a week straight and be like, okay, how come they’re not going up? It’s like, did you even put one promotional thing or do a guest appearance? Same thing with sales. Alright, how much did the sales increase the last week? What did you do? So, I’m glad we’re touching on all this because I love your strategy and approach to look at it, use it to your advantage, but realize, is this beneficial to me or not? I actually didn’t think you were gonna… I thought you were gonna go into software and the whole spreadsheet thing. I said it somewhat as a joke. But when you’re like, yeah, Microsoft Excel and Google sheets are great. I’m like, well, I don’t love them that much. But I do use them. I prefer the stuff where it’s just like…my attention span is like, okay, let me look at it real quick. I know where we’re at, but good gravy. I don’t like scrolling and figuring out just like, give me the answers.

John Johnson [20:00]
Look, at the end of the day, as I said, there is a little bit of data analytics for business people where you have to find your comfort zone. Because if you’re not going to use the data effectively, then it’s not going to help you. And I can have the most I mean, if you hired me, as a consultant said, come in analyze your data, I’m probably not doing it in Microsoft Excel. But if you said, I need some way to look at the output from this study, from this analysis, we would talk about, well, what’s most user friendly for you? Maybe it is a series of graphs, we’ve had clients. One of the big projects we did this year was for the NFL Players Association, where we actually helped them build a dashboard with all of the COVID results, state by state at every NFL city, and their members that access to a dashboard. So we talked about, well, how could we get that data most accessible. And what they wanted was a little map with a dashboard that could be updated, where players could go and just pick a city and it would pop up with what the sort of current testing rates were and what the current number of cases were, and things like that, week by week. And so we did that for them. And that was an example of you know, the client had a data issue, but they really cared about how we communicated the data to their members. And so again, I’m not saying that there aren’t things we can do that are more sophisticated. I don’t want to undersell that. But I think what matters most is that it was useful and effective, because it worked for them in their membership.

Mario Fachini [21:21]
And I think that’s the use case for most people, my answer would be colorful graphs that are color coded. I don’t want to look through a column of data. Just give me the answer in a pie chart.

John Johnson [21:37]
Look, we talked a little bit before. In addition to my data analytics work, I also testify as an expert witness, one of the things I have to do is I have to make information and data accessible to judges and juries. Now, people that don’t really want to hear…

Mario Fachini [21:51]
What’s their preference?

John Johnson [21:53]
Right. And so thinking about how you teach, I’ve had cases where I’ve done lots of sophisticated analyses, but the thing that actually carried the day was a pie chart, because that was the thing that made the most sense. So I think the lessons of all that, this is the teacher in me, I need to make the data accessible to you and come to you the place where you are in terms of your learning, your understanding, how you process the data, and a large part of using data effectively, in a business you hear the phrase, have a seat at the table. I think it’s a little bit overused. But if I can’t convey data in a way that makes sense to the audience, whomever that audience is, it doesn’t matter how sophisticated, how great the analysis is, if it’s the most insightful thing in the world, the translation, how do I make it make sense, is the real important part for having practical insights.

Mario Fachini [22:45]
That’s a great Expert Authority Insight. Yeah, you can have all the data in the world. But if it’s Greek to the person reading it.

John Johnson [22:57]
Look, I was an academic, I told you and I wasn’t academic for very long, just a few years. But I always found that talking in Greek letters and sort of the race to be the smartest in the room, I always wanted to be the one that made everybody else seem like they were the smartest in the room. Right? That’s how I’ve done my job. Well, as if I’ve talked to you, and you’re like, wow, I really understand that I learned something that means that we’re using the data effectively. So I think data analysis, it’s multifaceted. And yes, it’s about having the data, and it’s about answering the right question. But then it’s about that translation and that skill set of can you explain it simply? Can you make it make sense? And can you interpret it? That’s a very, very important part that is overlooked. But it is a critical skill, in my opinion?

Mario Fachini [23:45]
Well, I’m glad you’re sharing it with the audience, because I’ve talked to people about data before, even before the show. And most of them just go into like, oh, my gosh, let me show you all the in it’s like, you might just be asking, how many sales did I close this year versus last year? You don’t need to run a Venn diagram. 58 different ways. I mean, you can literally have two numbers with arrows pointing to one higher than the other. So clearly, you are the expert. And I’m sure you could give me 1000 different success stories, but what’s your most successful transformation? You’ve been able to give a company that’s worked with you?

John Johnson [24:30]
I think one of our goodies fairly recently, we had a retail outlet that actually needed some help, and that they were carrying a very large amount of inventory. And they were located in sort of a setting of a museum , most recent example, but because of COVID now suddenly things are shut down and they’re trying to figure out how much inventory should they be keeping on the shelves and they had all sorts of interesting low end items, high end items, and really we just did a pretty simple analysis of their sales and their turnover on their how much it was costing them to have certain items. And really, were able to help them just sort of help streamline their inventory. So they knew they didn’t have to carry anywhere near as much in terms of one very high end item that was never going to sell, although maybe it’s an attraction, it’s not really a successful business strategy to kind of keep that. And so there’s a simple analysis where it wasn’t very complicated necessarily. It was a practical problem they had that they came to us with, and we were able to sort of help them get some real insights about sort of trade offs in terms of profitability and velocity and things like that. Again, we do lots of these types of things where we’re just sort of helping people understand their data. And I think one of the nice parts about our business is we get to work with sort of gigantic companies that have really big problems. But we also really, I think, partly because we’re so entrepreneurial, and because we’re up, maybe we’re a midsize business now, we really try to find small businesses, we can help as well, because we’re like data analytics doesn’t have to be all high end, it’s not exclusive to the fortune 100 companies, and so we try to find ways to help companies at all stages of their development with their data.

Mario Fachini [26:15]
Well, I’m glad you are. And I think it’s great, because, while it’s fun, and it’s intriguing to be like, yeah, we worked with these large companies, like you’re saying, which is fantastic. The smaller ones, I would see the benefit to them as they get the expertise of the Fortune companies. And for you, it’s probably a lot less work to go. You’re not dealing with hundreds and millions of data sets. I mean, I know, one of the largest companies in the world, they employ over a million people alone. I’m thinking of some locally in love, the owners love their business happy form. They don’t have a million employees. Now, that’s not their business model. But I just know the sheer amounts of it. Sometimes the data, mass data makes it easier to find frequencies and different things, and it’s more revealing. And then other times, it’s like I’m gonna take this win. I’m glad it was easier to do, everyone wins. And let’s just be happy with it.

John Johnson [27:16]
Well, and I think again, part of what sort of drives me as a business person is I like to help people, right. I mean, there are times where in a large company, you might have really valuable insights, and you help them perform, but maybe the rewards aren’t as obvious as when you help a smaller company that sort of needs help right away, they’re like, wow, those are really valuable insights that we can act on today. I think that’s also part of it. So we kind of view that as sort of the way our analytics company sort of works is where we’re sort of able to handle obviously, large scale giant matters, which we have. But we’re also able to handle sort of one off smaller companies, small businesses, small business owners, we’re like, hey, we, we have tailored our programs, that we have things that are much more focused much more pinpointed to help people with their problems. And like I’m trying you can think of as a trusted adviser, right? I just want somebody who’s smart, who I can talk about my data problem with, and who will help me understand the insights and sort of empower me to do it. And so that’s kind of been our business philosophy all along. And it is very much tied to the teacher in all of us. I mean, a lot of our profile of our employees are people that kind of have come from academic backgrounds. But really, we’re more of the teacher type and less of the academic type. If that makes any sense.

Mario Fachini [28:31]
It does. And I want to ask you about your background. How did you start the company and what was the inspiration for it?

John Johnson [28:42]
As I said, I had been a professor early in my career right out of graduate school, I was going to be the most popular professor on the campus of University of Illinois. But I just wasn’t quite practical enough for me. So I moved to Washington, DC at that time, sort of to join a consulting firm. And that firm was really good to me, I learned a lot about the practical reality of doing consulting and litigation. But I kind of always had this nagging feeling that there was this other skill set I had beyond just being a good data economist, but that I wanted to sort of build a business in a certain way. I wanted to be very customer responsive, I wanted to sort of have a very high standard for sort of what the quality of the work was, we would do. And I wanted to really make it a meritocracy, where people no matter what their age or what their status, they could succeed if they just worked hard. And that was really sort of the beginning. So I started the firm in 2009, with two people. One who had been in my sort of former firm with me, and then another who’d been one of my undergraduate students who was an HR person and kind of we started the firm. We had like seven of us in a little tiny rented space. And then over time, we seem to sort of start to take off pretty quickly. And today we have about 70 people. 11 years later, we’ve got a lot of cases, we have a really good reputation in our space. And so that’s the story, I was kind of a PhD economist who discovered that I actually was pretty entrepreneurial too. And that’s been the most rewarding part by far is building something a little bit in your own image, and then finding other people that share that and building a vision. And then a vision from there sort of led to sort of a really good business model.

Mario Fachini [30:32]
Well, congrats on your continued success. And I’m glad you did pick up the entrepreneurial side, because it’s a lot of fun. And you can help a lot of people with it. And my favorite thing is, you’re not stuck with all the red tape. It’s like, if you want to do something, as long as for me, as long as it’s legal, moral and ethical 99% of the time, it’s like, you can just go and do it, find the people who collaborate. It’s like you can get stuff done so much quicker.

John Johnson [31:01]
Oh, absolutely. And I think it is empowering, just to be able to say, let’s point, let’s think about this carefully. Let’s go, alright, well, maybe that wasn’t a good decision. Okay, let’s pivot. Oh, that was a great decision. All right, let’s double down. I just think that flexibility and that fluidity that you can move quicker, faster, you’re not tied to every rule the same way at a large company. Now, I will say there’s been an evolution, when you go from a small, like six of you in a tiny room, to 25 people to 70 people. Now we have much more of an administrative infrastructure. Now you start to see where you do need certain structures and processes. I mean, there is an evolution of every company that said, we still were really true to our entrepreneurial bet. I mean, we are hungry, we are very customer service oriented, we really guard our reputation. We want to be a high end place where people know that when we give you an answer, it’s objective, it’s fair. But it’s also something you’ll understand. And so that’s been really the reward for me, it’s just watching this thing grow and build and continuing the excitement of where it will go in the future.

Mario Fachini [32:05]
Well, I will tell you what’s coming through. I know, we just got connected, but it’s definitely coming through.

John Johnson [32:10]
Thank you. I’m really proud of it. It’s been really the most formative professional thing in my entire life, just the fact that I’ve been able to help build this firm, with great people assemble my team. What I’m working on for the next generation. I mean, it’s not anywhere near retirement. But it takes a long time to develop experts. And so you know, immediately you build a firm, and it’s like, okay, well now how do we build I think we’re talking before about, I view it as sort of building a team, I’ve got to build for the eye, what’s the farm system? And then what’s going to be our sort of who’s our second baseman, oh, where do we have this? Or what was this piece? And so it’s really interesting, as we start to kind of go for the next generation, I think 10 years from now, what will this company look like?

Mario Fachini [32:54]
And that’s exactly I was just gonna ask you, I was gonna save this for the next part. But I want to ask you, where do you see it going 10 years from now and beyond?

John Johnson [33:03]
Well, look, I think there’s sort of two parts to it. And I said, one of the reasons why we started the analytics, part of the business is we are trying to diversify, because I think it’s good to have sort of a broader base than just the sort of primary litigation business. But I hope in 10 years from now that we will have both a cadre of experts on both our litigation side and our analytic side that we have sort of, I hope I’m an elder statesman, because I want to be put out to pasture. But I want it, part of this is to sort of create an environment where people can grow and thrive and bring their own sort of entrepreneurial bent to the process, serve our clients well. And so I don’t know if we’ll be double the size, or will be the same size, I’m not sure. But we’ll be different in terms of our configuration of what we’re doing. I suspect we’ll be bigger. I mean, we’re not contentious about where we are. But right now we’re in that process, where we’re really trying to develop talent. And in some respects, that sort of requires scaling and scoping effectively as you continue to give people the right opportunities. And so that’s a lot of what we’re in. We’re in sort of this growth mindset. But it’s a long run growth play, not a short run growth play.

Mario Fachini [34:08]
Yeah, because I was just gonna say you could have 50 of the right people instead of the 70 versus 200 of…

John Johnson [34:18]
Right? And you just can’t sacrifice culture, talent quality. We have a culture that is very embedded in our firm that we treat people with respect that we know Edgeworth actually not to give a little history lesson, but it’s kind of cool. Edgeworth was a famous economist in the 1800s. But he did, one of his main things was about the gains from trade. And so he has this thing called the edgeworth box that gets taught at every introductory economics class, and it’s kind of geeky, but it’s about getting to the point where everybody’s made better off and nobody’s made worse off. And that sort of hidden in our name is our corporate culture that we will do is we’re trying to make everyone better off. It won’t surprise you in the expert witness field and some other consulting fields, oftentimes there’s competition for clients, there’s, well, my success is at your expense. We’ve just done away with all of that at our firm, everybody is rowing the boat in the same direction to make everybody better off. And that’s just a really empowering part of the firm.

Mario Fachini [35:14]
That’s exciting. And I love the backstory. I’m glad you incorporated it in.

John Johnson [35:21]
We love Francis Edgeworth’s birthday is actually on the sixth. But we first started, we would give that off, it also happened to be always the day after the Super Bowl. So in the early years of Edgeworth, we always had the special Francis Edgeworth’s birthday day off, which was the day after the Super Bowl. Now we just give people a floating holiday. But that’s sort of how we do it in the beginning.

Mario Fachini [35:40]
Well, I have one more question for you before we go to the Imperfect Action Round and involve the Wheel of Whatever. So as the… oh, no, I don’t like that. There we go. When I can still see the slides. It’s not good.

John Johnson [35:56]
Okay.

Mario Fachini [35:58]
Yellow or black?

John Johnson [36:00]
Yellow? Whoo.

Mario Fachini [36:03]
Look at that you got yellow.

John Johnson [36:05]
All right.

Mario Fachini [36:06]
So my question for you is what do you do to be successful outside of business? What do you do with your personal time?

John Johnson [36:12]
Okay, that’s good. Well, I have a family. Although my kids are a little bit older. Now, my daughter’s in college, my son is a junior high school, I have a wife. And so what I try to do is some combination of running, although I don’t run all the time, but I try to get some kind of activity. And then I also write poetry. So I’m a writer. And so I like to write; it’s a totally different part of my brain than anything else I use. And so I like to kind of do that. It’s a really good way to sort of you think, well, you’re a data guy, how do you write poetry, but in fact, the way words fit together, the way sounds fit together, the way ideas come together. There’s a lot of that. So I do a lot of writing classes, I do online writing classes, and those kinds of things. And that’s a really big hobby of mine. Believe it or not.

Mario Fachini [37:01]
Wow, appreciate you for sharing that. And that’s… I was in the band choir and drama, and played piano and sax. Okay. So I can totally relate to and I’m an author as well. And I can relate to, that’s actually more of what I am. And I had a reality that I don’t want to reel it back in. But I had to discipline myself on the more analytical things, even though I can handle it. And I always have enjoyed it. In high school and college, I never wanted to, I always just liked having fun, but you need both of them for business. And I feel bad for the people who and it’s one of the reasons I do stuff like this and put out my books and different things, as well as you do. Because now it’s like we can take our expertise and give it to someone to help them. Because you have to bridge that gap, if all you know is the craft, but you never have the business side of it, you’re not gonna have a business. And if you’re so oriented on the business, you never do anything outside of that it’s not going to grow as well.

John Johnson [38:12]
I mean, it’s hard. Obviously, when you start a business, any business, it’s 24 seven, it’s an all in commitment, and you need the support of your family, your friends, I’m just sort of fortunate that I started my business with two of my closest friends. And 11 years later, we’re still two of my closest friends, which I think is a success. But I think at the end of the day, you do have to find other outlets, if for no other reason evolved your own sanity, but it makes everything sort of, I find I think of things much better when I’m not doing my job. That’s when I kind of strove. Sometimes my greatest insights come when I’m trying to write a poem or going for a run or things like that. I’m a workaholic. And it’s hard for me sometimes to remember, I have to take time for myself. I think that a lot of us that run businesses have that issue. But at the end of the day, I’m a better business owner, I’m a better husband and father too, if I take time to sort of be at my best.

Mario Fachini [39:06]
Well, I love that you’re doing that on both sides. And it’s like I said earlier, it’s definitely showing through so I got some more questions for you. We’re gonna thank our sponsor, and come back for the Imperfect Action Round.

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Mario Fachini [40:48]
And we are back with the Imperfect Action Round. John, are you ready to take Imperfect Action?

John Johnson [40:54]
I hope so.

Mario Fachini [40:56]
Three questions for you 60 seconds or less answers. The first one is what is the fastest path to the cache?

John Johnson [41:05]
Good idea and hard work.

Mario Fachini [41:07]
Excellent. Number two, what is the biggest problem you see your prospects making for the fastest way for them to fix it?

John Johnson [41:15]
Not taking the answers their data gives them seriously, and not trusting your instincts with their data.

Mario Fachini [41:21]
Okay, three, what is the best way to maximize customer lifetime value?

John Johnson [41:28]
Oh, look, I think data or not, it’s like pay attention to your customers. I mean, if you are listening to them, and you’re getting feedback from them, that’s the simple best way. I mean, customer service is king.

Mario Fachini [41:39]
Excellent. What books would you recommend to the Expert Authority World that have made the difference in your life?

John Johnson [41:46]
Oh, there’s so many books. Gosh, that’s tough. But I think that…

Mario Fachini [41:50]
you can go five or six.

John Johnson [41:54]
I don’t know what I want to do five or six. I just think for me, the book that I always think about is going a little weird is sort of Life of Pi. I just think that book is sort of such insights about sort of trusting yourself about the meaning of life and things like that. And so like I kind of go there first, again, I told you before, I’m a little bit of a poet. So for me, I kind of like it, I’m not traditional. I mean, there’s lots of great business books, but I’m not a traditional business book guy, I’m kind of more of a visionary type person. That’s what resonates with me. So that’s the one that I immediately think of.

Mario Fachini [42:26]
Excellent. And that’s not a business book, but it’s a good recommendation. And in the same vein of earlier, there’s stuff I like to read outside of business, too. When I was starting off, like you said, it was like business business business. But I found the more personal stuff you do, the better in business you are. And it’s fun to just not read another book with a different title. That’s the same topic as something else, or something even I wrote about. So. I mean, there’s a point. I don’t want to downplay it too much. But there’s a point where it’s like, I’m not a beginner anymore. This is repetitive now what?

John Johnson [43:06]
You have to be discerning with your time and what it is you spend your time reading. But yeah, for me, I just sort of look for books for a lot of inspiration. Sometimes I need that more as a leader that I do the latest greatest NBA technique.

Mario Fachini [43:18]
For sure. Well, where would you like people to learn more?

John Johnson [43:24]
Well, we definitely if you go to our website at Edgeworthanalytics.com. We should have a special sort of launch place, just /expertauthorityeffect, where that’s where you can read all about our company, we’re actually going to give away one of our data blueprint consultations for free to your listeners.

Mario Fachini [43:40]
Thank you.

John Johnson [43:41]
And you can read our white papers, and we have all sorts of interesting things on our websites and our recent webinars, things like that. So please check it out. And again we’re really accessible. And we’re about helping people solve problems, and really no problem is too small. Sometimes I think people are afraid to reach out. But we scale and scope our work effectively. Even if it’s just a half hour consultation, we can do those kinds of things. So I would just encourage people to check it out. And hopefully you’ll find something of interest.

Mario Fachini [44:09]
Excellent. Well, thank you for that. And I’ll make sure that the show notes page has the appropriate links.

John Johnson [44:15]
Terrific.

Mario Fachini [44:17]
Well, John, it’s been a pleasure. And I appreciate your expertise sharing with Expert Authority World.

John Johnson [44:23]
Thank you. I’ve had a really good time. It’s been great to talk to you.

Mario Fachini [44:26]
Alright, expert authority world. We have another great episode here today. I’ll see you tomorrow. Have a great day. And God bless.

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www.EAInterviews.com [45:08]
Hey thanks for listening to today’s episode. I hope you got a lot out of it I know I sure did. If you haven’t done so already, I invite you to subscribe to the show. And also be sure to check out EAInterviews.com for complete show notes, the full interview video experience, links to the resources we mentioned in more. Have a blessed day and I’ll see you tomorrow.