How Accurate is Your Data?

Posted on July 15, 2016 in Increase Project Profitability ,Q360 by

“Across our 10 branch offices, sales on average are up 7% last quarter.”

This statement tells you exactly nothing. But it sure sounds like good news in a management meeting. And seldom does someone ask the follow-up question.  It turns out that four of the offices each saw their sales double, while most of the other ones are struggling or even trending decreases in sales.

That’s the nuance of what’s really happening.  That’s an actionable piece of information, quite the opposite of the former; which might just lead to more of the same.  More of the same that lets the low performers hide for another quarter and the high achievers build resentment for the lack of recognition of a job well done for continuing to carry the company.

Averages almost always hide insights instead of exposing them. If the problem is worth talking about, it’s interesting enough to dig into it to show the true groupings and differences that the average is hiding.

Here are the follow-up questions to the announcement of a 7% increase in sales: What are the outliers? What do they have in common? Are there explainable trends, or is there merely noise? Quite often these follow-up questions are difficult to answer if you’re not tracking this level of detail day to day.  This requires reliable numbers when quoting, detailed job costing, or just plain accurate and consistent accounting across all branches.  That provides your management team with one version of the truth.

Then comes the hard part after finding the truth about the numbers. It’s having the guts to share the truth.


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