sumo wrestlers and high school teachers
For anyone who has read Freakonomics by Stephen J. Dubner and Steven Levitt, you will know exactly what we are about to talk about. For those of you who have not, stop reading this, go get that book, read it, then come back to us, trust us, it’s worth the read.
The basic premise of the book is finding the hidden meaning in what appears to be completely unrelated subsets within society. The hidden commonalities that predict human behaviour. With Sumo wrestlers and some American high school teachers, the thread is widespread, institutional, cheating. We won’t spoil the how, or why, you will have to read that for yourself.
Now, what does this have to do with the price of a pint of milk? Not a lot really, but there are some fantastic parallels between this book and your business performance. The cause, and effect, or rather the effect, and the cause.
You have bad days, missed targets, longer productions time because a machine broke, and there is a laundry list. However, you chalk it off, you do better, and you assign a fairly vague conclusion around it when the monthly management figures are a bit down, or you discuss productivity at quarterly meetings, when trying to forecast the next quarter, you get the idea.
However, we like specificity, and, so does your competition.
Most of the time, it is the effect that is noticed, not the cause. The cause is inferred and generalised with no real metrics assigned to it. However, what if you could see the cause happening, and head it off at the pass? What if the cause happening could then give you a definable cost analysis of additional overheads, and missed revenue generation?
Imagine this:
Condition a (staff on site) is below target b. Condition a means that output from machine c will be down x%. That % is below the required % to hit the output target for the day, alert the operations team to address either today or add extra staff to later shifts.
As opposed to the current solution of gesticulating at the end of the day and wondering why output has not met expectations, with maybe vague responses about people being sick, missed delivery coming in, missing stock, whatever the reason.
Identifying the cause removes the effect. Business is a small margin enterprise, being consistently 1% ahead of the curve, in every area, every day, puts you ahead of the game, and after 1 year, 5 years, you consistently move ahead of your competition. To do this, you need data, data that means something to you, and lets you make decisions rather than just look at graphs.
