Beliefs, prejudices and data

When you see a bunch of things moving around in a flock on a pond in the distance, making quacking sounds, and occasionally becoming airborne, you do not ask for DNA evidence to determine that they are ducks, because you already have a lot of background information about swimming ducks. If someone told you they [...]

No mean average-be careful of averages in indicators

People—and businesses—use averages all the time to measure performance.  Consciously or not, we use averages to make inferences about some underlying property of a population. For example, if Pine Crest School has higher averages than River Bank School, we infer that the “typical” student from Pine Crest is better than the typical student from River [...]

Alberta election results: 19 times out of 20 (if they don’t change their minds)

The election result this week in Alberta, Canada confounded a lot of people and cast the art of polling in a bad light.   The polls  predicted  that the Wildrose Party would win, but they were trounced by the PC Party.  Two days before the election, one poll gave the Wildrose 38% versus the PCs 36%. [...]

misLeading pant sizes-why women aren’t as thin as they think

The Economist magazine is  taking a jab at another sort of inflation. Women’s pant sizes, while nominally the same, have actually been increasing in girth.  The British new magazine estimates that an average size 14 pair of women’s pants  “is now more than four inches wider at the waist than it was in the 1970s.” [...]

Facebook’s new check-in measure: accuracy vs practicality

Facebook sent out a message the other day on its new way of counting “check-ins” to improve accuracy. The result of the increased “accuracy” will be a drop in the number of check-ins.  The message said: “We are revising check-in numbers on Facebook Pages to give you a more accurate picture of how people are [...]

How do you measure the performance of a business book?

Today* stores start selling our book—misLeading Indicators: How to Reliably Measure your Business. It has been a while coming. It’s natural for us as authors to wonder how it will “perform”. Many of our acquaintances wonder too, and ask us how we expect it to perform. Their indicators are usually sales or royalties.  Those are [...]

Brilliant propaganda, but lousy indicator of rate of growth of US debt.

  There is a little graphic being circulated around the Internet intended to show that President Obama has recklessly doubled the total US debt accumulated since President Washington.                   As a piece of political propaganda it is brilliant. It implies that President Obama’s administration is worse than [...]

A leading indicator of business cycles that have already happened

A “leading indicator” is supposed to forecast, or at least to help the person using it, to make a forecast. The Conference Board recently announced that it was changing its Leading Economic Indicator to address structural changes that have occurred in the US economy in the last few decades.  The new indicator was released on [...]

Hoaxing, forging, trimming, faking, cooking and falsifying measurements

There have been several recent high-profile cases of scientists hoaxing, forging, trimming, cooking or falsifying their data. These cases occurred in spite of the fact that scientific publications must be peer-reviewed before publication, and that scientific findings must be replicated before they are confirmed. Would the safeguards in place in most business catch similar acts? [...]

How many people visit your website?

Whether you are writing a blog like this one, or run a major e-commerce website, it’s natural to want to know how many people visit. There are lots of tools—generally known as web analytics—to measure web site traffic. The problem is, “People don’t visit websites. Their computers do.”  But you cannot identify how many people [...]

Are Americans getting wealthier or poorer? It depends on how you measure “wealth.”

The standard measure of wealth is GDP per capita. The chart below shows that Americans have been getting continually wealthier for decades, with a few blips here and there (source of data). The measure of wealth—Gross Domestic Product, is based on the dollar value of economic transactions. Such a measure depends crucially on the definition [...]

Dead right.

I snapped this picture at a cross walk in Manhattan near Central Park over the weekend. What does it say? Stop or walk? You could walk and not, technically, be jaywalking.  You stand a good chance of getting smacked by a car though if you do. You’d be technically right. And maybe even dead right. [...]

Studies show studies don’t show

It’s used in medical research, engineering research, and just about every other form of research. It determines whether research is “significant” or destined for the garbage bin. And it is one of the most misleading indicators ever developed.  It is known as the “p-value.” The p-value is the number that comes out of most orthodox [...]

misLeading Indicator suggests world exporting to aliens

When I do calculations on a performance indicator, I usually do the calculation more than one way. This gives me a good check on my method, and gives me assurance that the indicator is meaningful if both calculations match. In some cases this task is simplified if there is some constraint that must be met, [...]

Why your customers may not see things the way you do

Are your customers experiencing something completely different from what your indicators tell you they are experiencing? Probably. Suppose a retail company with branches of different sizes measured some aspect of customer service in each of its branches, say wait times.  Will the average wait time be a good representation of the average customer’s experience? Take [...]

Moneyball shows that you should challenge thinking about KPIs

Business writers often speak of “measures that drive future performance.” The trick is figuring out what measures those are. Doctors have been measuring their patients since the Italian doctor Santorio Santorio invented a scale for the Galileo thermometer in 1612.  But patients can (and do) die soon after they get a clean bill of health, [...]

What polls, police radars and the Hawthorne experiments have in common

There is an election campaign in my home province of Ontario. As often happens during elections, somebody raises the issue about whether public opinion polls influence the outcomes of elections (such as in this article). If only measurements involving people could produce objective information. People and the way they react to measurements make this very [...]

The Operational Dashboard that had no Key Performance Indicators

The “dashboard” is often used as a metaphor by business writers and consultants to explain to managers that they need performance measurement and key performance indicators for their business, just like they do for their cars. Otherwise they’ll drive their business off the road, they (falsely) argue. The problem is, the dashboards on cars don’t [...]

The importance of structural information

Business writers and consultants today typically advise managers to calculate indices and percentages to measure the state of their enterprises. For example, Kaplan and Norton, in the “Balanced Scorecard”, suggest measuring “strategic information availability” with the “percentage of processes with real-time quality, cycle time, and cost feedback available” and “percentage of customer-facing employees having on-line [...]

Can you make sense of on-line media metrics?

On-line advertizing has grown immensely over the last few years. One estimate pegged growth from $55 million in 1995 to $54 billion in 2009, an annual growth rate of 63%. It’s not surprising then that there is some interest in trying to measure on-line advertizing. If an advertiser pays for a thousand ad “impressions” with [...]