“The Early Warning System” In Business—Part 1

If the statistic is down, something is wrong. Graphs show this by visual means. There is a reason for a stat dropping. It’s not “karma” or some “natural phenomenon.” Some people attempt to excuse a down stat by inventing “reasons,” a huge error.

“The one big god-awful mistake an executive can make in reading and managing by graph is being reasonable about graphs. This is called JUSTIFYING A STATISTIC. This is the single biggest error in graph interpretation by executives and the one thing that will clobber an organization. …

“Never JUSTIFY why a graph continues to be down and never be reasonable about it. A down graph is simply a down graph and somebody is goofing. The only explanation that is valid at all is, “What was changed just before it fell? Good. Unchange it fast!” If a graph is down it can and must go up. How it is going to go up is the only interest. “What did we do each time the last few times just before it went up? Good. Do it!”

“Justifying a graph is saying, “Well, graphs are always down in December due to Christmas.” That doesn’t get it up or really even say why it’s down!

“And don’t think you know why a graph is up or down without thorough investigation. If it doesn’t stay up or continues down then one didn’t know. It takes very close study on the ground where the work is done to find why a graph suddenly rose or why it fell.”3

Keeping and maintaining statistics is a matter of confront. What makes graphs so useful for those who want to play the game successfully is the fact that they represent actuality. We don’t want to invalidate the overall production because of a down week after many up weeks, but we don’t want to allow the “option” for lower stats to go by unacknowledged either.

If we permit a down week—because the week before was so high—we are being reasonable and validating a down stat, which will bring more down stats. <continued in Part 2…>

3 Hubbard, “Statistic Interpretative, Statistic Analysis,” Policy Letter of 6 November 1966, Organization Executive Course.

Arte Maren

International Speaker, Writer and Business Consultant
Author of The Natural Laws of Management: The Admin Scale

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“The Early Warning System” In Business—Part 2
“The Early Warning System” In Business—Part 1
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