Principle 5: Improved Decisions (Item 5)
Effective use of facts, data and knowledge leads to improved decisions.
At a basic level, Principle 5 says use facts to check what you "know".
That might sound like a contradiction, but it is not. A very common
mistake by almost everybody is that they "know" the reasons
for things and act according to that knowledge. Well, it might come
as a huge surprise that people do not do this well. Most people are
wrong about what they "know" a great deal of the time.
Remember the Melbourne train company with the late trains from Principle
4 (`To Improve the Outcome, Improve the System'). They "knew"
it was "wheelchairs" that caused late trains. They "knew"
that having to hold the train while someone in a wheelchair got on the
train was the cause of the trains being late. It was a "known fact".
Until someone gathered some real data. Wheelchairs accounted for less
than 0.1% of late trains. All the planning about wheelchairs (while
helpful for the people in the wheelchairs) was of no use to getting
the trains to run on time.
Having the real facts, instead of imaginary ones, allowed attention
to issues that might make a difference. Get the facts!
We have come across many examples of employees who are thought not
to care about the company. They are lazy. They are always late, always
having to leave on time — distracted and inaccurate in their work.
Clear signs that they do not care. Right? Wrong! When the boss finally
gets to get the facts by asking, we find a sick child or a sick spouse
that requires constant attention and resultant poor sleeping patterns.
It also tells something about the degree of trust in the workplace.
(What repercussions was the employee frightened of that prevented immediate
disclosure?) These are very different problems from "lazy"
and require a very different response. Get the facts!
What assumptions are you making (and acting on) about the causes of
problems in your processes and with your employees? Get the facts!
Managers often "know" that one of their staff is lazy and
slow, always making mistakes. However, when you check the facts, you
find out that the data they are supplied with is always wrong and they
are having to spend many hours trying to get accurate data, or you have
not provided them with adequate training. These are very different problems
from "lazy". Get the facts.!
Often facts need to be organized in some way to make them more useful
– more easily interpreted. For example, it is easier to extract
useful information from a graph than from pages of numbers.
Although there are a great many analysis tools, you really only need
to be familiar with about twenty. About half of those take five minute
to become expert at using. The Memory Jogger II is a useful pocket size
compilation of the most commonly used useful tools. You should be familiar
with all of them.
Get computer literate. A least enough to do your own analyses. We are
amazed at the number of executives and senior managers who cannot use
even the simplest computer equipment. Or who have all the analysis done
for them because they "don't have the time". The person who
does the analysis gets significantly more information than the person
gets the analysis delivered to them. Good analyses generate questions.
When you do the analysis yourself, you get to explore those questions
yourself. Remember, your actions say very loudly what you consider important.
Delegating analysis says using data to make decisions is not important.
Pareto. Pareto lets you focus your efforts on the most important
issues. Pareto is based on the principle that 20% of sources cause 80%
of the problems. It is very useful. However, its main use may be in
the "cost world". (Remember the Chain Analogy from Principle
4 `To Improve the Outcome, Improve the System'). If we prioritize according
to the size of the problem, we may not improve the company. In the world
where throughput is important, we should be concerned with only those
improvements that strengthen the throughput chain, ie give us more throughput
(while simultaneously reducing inventory and operational expenses).
That means that Pareto based on size alone may not be appropriate.
Brainstorming. Brainstorming is a commonly used analysis tool.
Brainstorming belongs to a group that includes fishbone diagrams, affinity
diagrams, force field analyses. Be aware that brainstorming does not
give facts (neither do the rest of the group). It is a way of collecting
opinions and arranging those opinions into groups. All these `opinions'
need to be subsequently checked by gathering facts.
Multivoting. Multivoting is often used to prioritize amongst
a number of potential ideas. It has two main problems.
- The vote is only opinion and needs to be verified by facts.
- The issues getting the most votes may just be the popular, obvious
issues. Often you are looking for the new, the innovative.
An analogy can be made with your favorite dish at your favorite eating-place.
What makes that food your favorite is very probably the very, very small
amounts of flavor or the skill of the chef. Multivoting can give votes
for bulk and neglect the flavor. An issue that gets the most votes may
not be the most important.
A useful rule of thumb to ask about collecting data is "What will
you do as a result of getting the data?"
Most non-operational data is seldom used to inform a decision. For
example, most customer or employee survey information is not used for
anything. Often, these surveys are so badly designed that they can not
be used to inform a decision. This is usually because surveys give you
back information that you already knew – warm fuzzies or ratings
on warm fuzzies. Such surveys are a waste of company time and money
— probably conducted because someone said this data should be collected.
If you are not going to do something with the data or will not be able
to do anything with it, do not gather it.
We often find companies planning to conduct yet another survey that
will tell them nothing they do not already know or can guess with a
high degree of accuracy. If it will tell you what you already know,
do not gather it!
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