Statistical Business Analysis
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Comments From Executives:

“We have been using these [ charts ] for the last two quarterly reviews, with what we consider good results. As GM [General Manager] the main advantage has been to get the organization to face reality and allowing us to quickly focus on the real issues. In other words, when you put the numbers up against the statistical tests, it is very easy to see at a glance whether things are stable, or whether they are indeed improving. In this way we eliminate a lot of the posturing and positioning which used to go on in the past, especially all of the effort which was expended on 'selling Management' that things were going very well, when in fact they often weren't.”
General Manager, Venezuela to General Manager, Philippines 3/2/98

“IN CONTINUING PRAISE OF STATISTICAL CONTROL CHARTS. In a previous note, we briefly mentioned some immediate benefits we were getting from using statistical control charts in our Quarterly Strategy reviews. The more we use the method, the more powerful a tool it becomes for the organization and business. A couple of examples:

It helps us focus on what the issues are, not on what they aren’t. If the numbers do not show we have significant change, we do not even discuss them. This saves tremendous time and energy, previously used to explain routine variations.

In this context, it has had a couple of important collateral benefits. There is no room for either posturing (tooting the horn, making a silk purse out of a sow’s ear), or pointing fingers. The former promotes intellectual integrity; the latter significantly reduces functional barriers.

It has allowed the whole organization to understand and address variability. Previously everyone would say, “yeah, variability is bad”, but it was seen as a manufacturing issue. Tracking and analysis by the whole group showed that a) most of the variability is caused by our own actions(not the turbulent economic situation or other convenient scapegoat), and b) it’s everyone’s problem, as it saps organizational capacity through rework, etc.

We still have a very long way to go, but interventions we have made in related business planning processes are allowing us to ship more than before, while reducing variability.

It promotes multifunctionally aligned analysis, learning, and creates an Institutional memory. This is very important in these unstable economies where there is so much noise that the whole organization can become very easily distracted, and new managers could avoid relearning the same lessons.”
General Manager,  Venezuela to President & CEO

“We have taken over the use of the tool into my Greater China Corporate Forecast/Analysis group and you may already have had some questions from one of our analysts. Our focus for now is on volume as that's the key driver by far, then we'll branch out to dollar sales.”
Vice President – Finance, Greater China - 7/22/99

“Jim, I love this stuff and how clearly it shows what we need to do. I still think we are working on too many small ideas, which we convince ourselves are game changing when they aren't. I've asked Human Resources to take another look at this and help us change this culture using these statistical techniques to help us focus on the big, game changes ideas. Thanks for sharing this. It is fascinating to me!”
President, North East Asia - 4/26/00

“Second, thanks very much for passing this along the analysis of company results. It's fascinating data, and clearly suggests that these major "interventions" didn't significantly change the progress of our dollar sales or earnings trends. The biggest "intervention" being the acquisition might say we should be looking for another one of "those" big acquisitions, getting us into new businesses/new geographies, etc.

Thanks very much for sharing. Great data. Encouraging that we're looking at this at the corporate level, too.”
President, ASEAN, Australia, India 10/11/00

“Jim, this is very helpful and gives the needed additional perspective. Like you, I agree that we need to get out of the index versus year syndrome and quarterly promise to take a much longer and badly needed perspective to the business. We will need to train the market as well as our own internal people. Keep pushing for this.”
Business Unit President 1/30/01

I participated in one of your presentations in Kobe, Japan a few years ago. I had the opportunity to read your latest analysis of our 2nd quarter news release. I find your analysis stimulating and thought provoking. I completely agree with your conclusions. All too often we try to attribute results to a special cause when in fact things are normal and future business tends to prove that. I'd appreciate it if you would add me to your distribution list and send me your analysis on a regular basis. I need the external perspective. It will help me do a better job.”
Vice President,  Global Marketing Development Organization and Sales 2/1/01

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