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67fcf87 The fact is that the preference for ignorance over even marginal reductions in ignorance is never the moral high ground. Douglas W. Hubbard
9bf3677 Consider these statistics. It used to cost Farm Journal, a client of Key Survey, an average of $4 to $5 per respondent for a 40- to 50-question survey of farmers. Now, using Key Survey, it costs Farm Journal 25 cents per survey, and it is able to survey half a million people. Douglas W. Hubbard
fb42fcd We need to lose less often in the fight against the bad guys. Or, at least, lose more gracefully and recover quickly. Douglas W. Hubbard
4994184 We find no sense in talking about something unless we specify how we measure it; a definition by the method of measuring a quantity is the one sure way of avoiding talking nonsense. . . . --Sir Hermann Bondi, mathematician and cosmologist3 Douglas W. Hubbard
e65b43d The fact is that the preference for ignorance over even marginal reductions in ignorance is never the moral high ground. If decisions are made under a self-imposed state of higher uncertainty, policy makers (or even businesses like, say, airplane manufacturers) are betting on our lives with a higher chance of erroneous allocation of limited resources. In measurement, as in many other human endeavors, ignorance is not only wasteful but can a.. Douglas W. Hubbard
f4a1331 the objection to using stats boils down to nothing more than an irrational fear of numbers causing some to believe math somehow detracts from understanding or appreciation Douglas W. Hubbard
1524670 Bandwagon bias. Douglas W. Hubbard
6d8e693 The most important questions of life are indeed, for the most part, really only problems of probability. --Pierre Simon Laplace, Theorie Analytique des Probabilites, 1812 Douglas W. Hubbard
5fe70e2 Knowing something about the monetary value and cost of the information in a measurement puts a new light on what is "measurable." If someone says a measurement would be too expensive, we have to ask, "Compared to what?" If a measurement that would just reduce uncertainty by half costs $50,000 but the EVPI is $5,000,000, then the measurement certainly is not "too expensive." Indeed, it would be a bargain. But if the information value is zero.. Douglas W. Hubbard
09e0106 Any decision we think we are about to make is something that can be Googled before we commit to a choice. Douglas W. Hubbard
3353547 It is not too bold a statement to say that a software development project is one of the riskiest investments a business makes. For example, the chance of a large software project being canceled increases with project duration. In the 1990s, those projects that exceeded two years of elapsed calendar time in development had a default rate that exceeded the worst rated junk bonds (something over 25%). Douglas W. Hubbard
fa46155 Is a programmer who gets 99% of assignments done on time and 95% error free better than one who gets only 92% done on time but with a 99% error-free rate? Is total product quality higher if the defect rate is 15% lower but customer returns are 10% higher? Is "strategic alignment" higher if the profit went up by 10% but the "total quality index" went down by 5%?" Douglas W. Hubbard
1f18697 Once managers figure out what they mean and why it matters, the issue in question starts to look a lot more measurable. Douglas W. Hubbard
77e038f Myth: When you have a lot of uncertainty, you need a lot of data to tell you something useful. Fact: If you have a lot of uncertainty now, you don't need much data to reduce uncertainty significantly. When you have a lot of certainty already, then you need a lot of data to reduce uncertainty significantly. In other words--if you know almost nothing, almost anything will tell you something. Douglas W. Hubbard
10f70fe Hoshin Kanri Business Methodology The balanced scorecard had its origins in Hoshin Kanri, so it is appropriate to examine this business methodology. As I understand it, translated, the term means a business methodology for direction and alignment. This approach was developed in a complex Japanese multinational where it is necessary to achieve an organization-wide collaborative effort in key areas. One tenet behind Hoshin Kanri is that all e.. Douglas W. Hubbard
1336c70 Success is a function of persistence and doggedness and the willingness to work hard for twenty-two minutes to make sense of something that most people would give up on after thirty seconds. --Malcolm Gladwell, Outliers: The Story of Success Douglas W. Hubbard
b403654 It seems that to have a truly profound revelation, you almost always have to look at something other than what you have been looking at in the past. Being able to compute the value of information has caused organizations to look at completely different things--and doing so has frequently resulted in a surprise that changed the direction of a major decision. Douglas W. Hubbard
982f6d9 For all practical decision-making purposes, we need to treat measurement as observations that quantitatively reduce uncertainty. A mere reduction, not necessarily elimination, of uncertainty will suffice for a measurement. Douglas W. Hubbard
134130d measure what matters, make better decisions. Douglas W. Hubbard
06aae55 the traditional form of Hoshin Kanri, there is a grouping of four perspectives. It is no surprise that the balanced scorecard perspectives are mirror images (see Exhibit 1.8). As with the balanced scorecard, Hoshin Kanri can be improved with the introduction of employee satisfaction and environment and community. EXHIBIT 1.8 Similarities between Hoshin Kanri and Balanced Scorecard Perspectives Douglas W. Hubbard
adc776e A problem well stated is a problem half solved. --Charles Kettering (1876-1958), American inventor, holder of 300 patents, including electrical ignition for automobiles There is no greater impediment to the advancement of knowledge than the ambiguity of words. --Thomas Reid (1710-1769), Scottish philosopher Douglas W. Hubbard
2b3c3a2 1. Key result indicators (KRIs) tell you how you have done in a perspective or critical success factor. 2. Result indicators (RIs) tell you what you have done. 3. Performance indicators (PIs) tell you what to do. 4. KPIs tell you what to do to increase performance dramatically. EXHIBIT 1.1 Four Types of Performance Measures Douglas W. Hubbard
84dc2b3 The common characteristic of these measures is that they are the result of many actions. They give a clear picture of whether you are traveling in the right direction. They do not, however, tell you what you need to do to improve these results. Thus, KRIs provide information that is ideal for the board (i.e., those people who are not involved in day-to-day management). KRIs typically cover a longer period of time than KPIs; they are reviewe.. Douglas W. Hubbard
1d8e391 Establishment of a quarterly rolling planning regime, wherein management both sets out its revenue and expenditure requirements for the next 18 months and seeks approval for expenditure planned for the next 3 months, is a key requirement for beyond budgeting management. Each quarter, before approving these estimates, management sees the bigger picture six quarters out. While firming up the short-term numbers for the next three months, all s.. Douglas W. Hubbard
15b04b9 It is the mark of an educated mind to rest satisfied with the degree of precision which the nature of the subject admits and not to seek exactness where only an approximation is possible. --Aristotle (384 b.c.-322 b.c.) Douglas W. Hubbard
5674dbe what makes a measurement of high value is a lot of uncertainty combined with a high cost of being wrong. Douglas W. Hubbard
087d6c5 The PIs help teams to align themselves with their organization's strategy. PIs are nonfinancial and complement the KPIs; they are shown with KPIs on the scorecard for each organization, division, department, and team. Performance indicators that lie beneath KRIs could include: Percentage increase in sales with top 10% of customers Number of employees' suggestions implemented in last 30 days Customer complaints from key customers Sales calls.. Douglas W. Hubbard
9336c20 Understanding how to measure uncertainty is key to measuring risk. Understanding risk in a quantitative sense is key to understanding how to compute the value of information. Understanding the value of information tells us what to measure and about how much effort we should put into measuring it. Douglas W. Hubbard
da72089 Result indicators that lie beneath KRIs could include: Net profit on key product lines Sales made yesterday Customer complaints from key customers Hospital bed utilization in week Douglas W. Hubbard
e5fefdb researchers have run experiments25 showing that experts can be trained to be better at estimating probabilities by applying a battery of estimation tests, giving the experts a lot of quick, repetitive, clear feedback along with training in techniques for improving subjective probabilities. Douglas W. Hubbard
693cd0b Bertrand Russell once said, "Mathematics, rightly viewed, possesses not only truth, but supreme beauty. . . ." Douglas W. Hubbard
2c5eddd One example is how Amazon.com provides free gift wrapping in order to help track which books are purchased as gifts. At one point Amazon was not tracking the number of items sold as gifts; the company added the gift-wrapping feature to be able to track it. Another example is how consumers are given coupons so retailers can see, among other things, what newspapers their customers read. Inexpensive personal sensors and apps for smart devices .. Douglas W. Hubbard
d35d051 For all practical decision-making purposes, we need to treat measurement as observations that quantitatively reduce uncertainty. Douglas W. Hubbard
9105f70 If you know almost nothing, almost anything will tell you something. Douglas W. Hubbard
acc56d4 Anything you need to quantify can be measured in some way that is superior to not measuring it at all. --Gilb's Law Douglas W. Hubbard
008419f The commonplace notion that presumes measurements are exact quantities ignores the usefulness of simply reducing uncertainty, especially if eliminating uncertainty is not feasible (as is usually the case). Douglas W. Hubbard
d487a73 The first 100 samples reduce uncertainty much more than the second 100. In fact, even the first 10 samples tell you a lot more than the next 10. The initial state of uncertainty tells you a lot about how to measure it. Douglas W. Hubbard
6339c1d Given a particular observation, it may seem more obvious to frame a measurement by asking the question, "What can I conclude from this observation?" or, in probabilistic terms, "What is the probability X is true, given my observation?" But Bayes showed us that we could, instead, start with the question, "What is the probability of this observation if X were true?" The second form of the question is useful because the answer is often more st.. Douglas W. Hubbard
efd5987 If you don't know what to measure, measure anyway. You'll learn what to measure. Douglas W. Hubbard
1a6802a whether a finding is statistically significant is not the same thing as whether your current state of uncertainty is less than it was before or what the economic value of that uncertainty reduction would be. Douglas W. Hubbard
332e704 When presented new information, we have no other option than to relate it to what we already know--there is no blank space in our minds within which new information can be stored so as not to "contaminate" it with existing information. --Clifford Konold, Scientific Reasoning Research Institute, University of Massachusetts" Douglas W. Hubbard
143b497 A cybersecurity expert can become well versed in technical details such as conducting penetration tests, using encryption tools, setting up firewalls, and much more--and still be unable to realistically assess their own skills at forecasting future events. Douglas W. Hubbard
42c8d35 The Likert scale. Respondents are asked to choose where they fall on a range of possible feelings about a thing, generally in the form of "strongly dislike," "dislike," "strongly like," "strongly disagree," and "strongly agree." Multiple choice. Respondents are asked to pick from mutually exclusive sets, such as "Republican, Democrat, Independent, other." Rank order. Respondents are asked to rank order several items. Example: "Rank the foll.. Douglas W. Hubbard
4469546 We attribute the problems of our children to liberalism, conservatism, godlessness, godfulness, evolutionism, creationism-anything that seems to make sense, except the quiet notion that contemporary parenting is a complex set of learned skills, many of which seem counterintuitive to us. It's not religion and it sure ain't politics. And it can be learned from good and bad sources, so we must constantly question and upgrade our learning. Michael J. Bradley