Stop Knee-jerk Reacting To Trends That Aren't Real!

So your sales are down a bit from last week

So your sales are down a bit from last week. Or maybe it's your profit or new leads that are down, or your expenses have popped up a bit. You're probably ready to rampage in search of the source of the problem, or at least mope around for a few days. But if you indulge your reflex reaction, you'll be wasting your time and energy. Just because this week's numbers - or this month's or this quarter's - are different from last, doesn't mean there's really a difference. Even though the numbers might be down, it doesn't mean the trend is going down too. There are lots of reasons why this week's results might differ to last week's results, OTHER THAN there being a problem. Some of the reasons for what we call "natural variation" in our performance results are these: * The accuracy of your data is less than perfect. Actually ALL data is less than perfect because of typing errors, rounding errors, and measurement instrument errors (like scales or survey questions or the human eye or ear). * The ambient variables that can affect your measure are many and varied, and you'll never be able to control them all. The daily media will affect your sales to some degree, as will your competitors' promotional activities, your customers' moods, and even the weather. It's the controllable variation that you want to focus on. The controllable variation is caused by your decisions and actions, like how you design your promotional messages, how you design your business processes, how you design your products and services, to name but a few examples. And the only way you can see the effects of controllable variation is to look at the big picture in your data - look for sudden shifts or gradual shifts that affect groups of consecutive points (a bare minimum of 3 consecutive points, but more usually around 7). What you need to do, to truly see what's actually going on in your business performance and discern controllable variation from the natural variation, is learn to look at patterns in your data, not at the individual points of data themselves. Knee-jerk reacting to the points from week to week or month to month wastes your time in chasing problems that aren't there, and missing systemic opportunities to learn what really works and what doesn't in controlling your business success. It's a hard habit to get out of, most certainly, but it's ESSENTIAL that you stop knee-jerk reacting to your data if you want to reach your goals with less time and less investment. And here's the most powerful thing you can start doing immediately, to focus on the patterns and not the points: --> Graph your business performance measures in a time series line chart with at least 20 historic points of data (e.g. two year's worth of monthly values). TAKE ACTION:

Go get at least 20 historical points for each of your performance measures - the numbers you look to regularly to monitor your business success - and start monitoring them using time series graphs. Train your eye to look at the patterns, not the points.

Stop Knee-jerk Reacting To Trends That Aren't Real!

By: Stacey Barr

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