If you let headline statistics blindly drive your actions, you’re likely to become quickly confused.

Yesterday, for example, the IFS reported that the number of people in poverty is forecast to increase in the next few years. The news headlines carried an implied message: something must be done.

But poverty isn’t what it used to be.

Poverty is now a relative term, and includes all households with an income of less than 60% of median household income. So, as median household incomes are about £20,000, households with incomes below £12,000 are currently classed as in poverty, but if median incomes were to rise to £30,000 poverty would begin at £18,000.

It’s a moot point whether a household on £13,000, when median incomes are £20,000, would become poorer if its income rose to £17,000 in a world with median incomes of £30,000.

My point is not to argue the point either way, but to highlight the danger of simply responding to the headline statistic, and not the broader situation.

It’s the same in business. You can’t simply go after sales if they’re unprofitable, or reduce costs if it means you lose the ability to generate growth. Similarly, it’s likely that if you’re looking to grow NPD your research and marketing costs will increase, and you shouldn’t be surprised to see that happen.

The most successful companies are those that can maintain their investment even when results may not, at first sight, be coming through, and which redouble their efforts to make it happen. The weaker companies are those that, on first sight of a negative statistic, change their strategy, cut investment and look for another solution completely.

McKinsey, the consulting firm, has reported that the companies that came out of the previous recession the strongest were those that maintained investment in marketing and NPD and that sought to make targeted acquisitions. Their statistics and performance measures may not necessarily have all been on ‘green’ at the time, but the leaders of these businesses were focused on their organisation’s longer-term strategy and success, and not just the short-term numbers.

© Stuart Cross 2011. All rights reserved.