Leadership Barometer 37 Five Mistakes Using Data

February 10, 2020

The Great Quality Guru, W. Edwards Deming had a lot to say about how managers use data incorrectly and waste the resources of an organization.

It was part of his philosophy of quality which he called “profound knowledge.” He stressed a number of mistakes typically made by managers when handling data. Here are some of the problems along with the antidote for each misuse.

Mistake 1 – Assuming variation is a result of special cause variation when it is really due to common cause variation.

Common cause variation is when a system is in statistical control with small random type variation occurring.

The only way to tell if a system is in control is to consider all the data, usually by plotting it, and finding out if the data variation is within certain defined bounds, called “control limits.”.

If it is in control, then for managers to ask people to explain the variation is simply a waste of their time. People will dutifully go off and try to find out what caused the variation, but the answer will be only a guess and not valid information.

When one or more data points go outside the control limits of normal variability, then there is a special cause. In these cases, it is not only possible but vital to determine what caused the variation so it can be controlled and eliminated in the future.

Most managers fail to determine if a signal is due to special cause variation when they ask underlings to explain what happened. This causes a large waste of effort and time and it lowers trust.

Mistake 2 – Assessing the capability of a process based on the most recent data point.

It is tempting to react to the most recent data and ask people to take corrective action based on that. At home, we might say, it’s cold in here, why not turn up the heat?

But just because it is cold at the moment does not mean the system needs to be adjusted. It may be the low point of the cycle that is in common cause variation. In which case, if we turn up the thermostat, we are doing what Deming called “tampering.”

Tampering is defined as moving the set point of a system experiencing common cause variation in an attempt to reduce the variation. In fact, it can be demonstrated that “chasing” the perfect setting will result in a large increase in the variation of the process. It is better to leave things alone.

Many of us have experienced this when sitting in a meeting. All of a sudden someone will say, “Whew, it is very warm in here” and turn down the thermostat. Ten minutes later people in the room are reaching for their sweaters because they are chilled, so up goes the thermostat.

All day long people fiddle with the darned thermostat and swear at the heating system. The problem resides in the fingers of the people playing with the setting, not the furnace control. They are tampering, which results in roughly double the temperature variation than if they just left things alone.

Mistake 3 – Interpreting two points as a trend

This flaw is ingrained so deeply into the fabric of our thinking that we rarely even realize how stupid most statements of movement really are. Every day we read in the paper or hear on the news something like the earnings for Company X are up by 20%. We think that is a good thing. Rubbish!

All it means is that in comparison to four quarters ago the earnings are 20% higher. It says nothing about the actual trend of the data. For knowledge of how the company is doing, we need to plot the data and consider the quarterly earnings over something like 8 consecutive quarters. Only then we can know what is really going on.

Many advertisements for products are based on the faulty logic that two points make a trend. When we hear that interest rates on mortgages is down by ½ point, that is a symptom of two points equaling a trend. We really cannot use that data to imply what has been happening to interest rates in the past or is likely to happen in the future.

Mistake 4 – Looking for blame rather than root cause

When something goes wrong, managers often focus on who messed up and why rather than what aspect of the system was the root cause so it can be fixed. They think if they can pinpoint the culprit and punish him or her that will eliminate problems in the future.

Actually, the reverse is true. By trying to find a scapegoat, people tend to hide the truth and work to pin blame on other people to protect their own interests. That leads to infighting, conflict, and other disruptive behavior.

Mistake 5 – Too much automation of process data.

This issue is counter intuitive. One would think that data plotted and interpreted by computers would be superior to that plotted by hand.

In fact, data where people have been involved in the process is more useful, because people have the ability to spot peripheral issues and correct them where a computer will just keep logging rubbish.

When people rely on the machine always being right, there can be disastrous results because, at the root of it, the machines are controlled by people, but once programmed, people tend to rely too much on the machine and forget to check for sanity.

That situation is how pilots occasionally fly into the side of a mountain, because they rely too much on the dumb auto pilot and forget to watch where they are going.

When we take the time to use data correctly, we normally build higher trust within an organization, because people are not being asked to resolve a figment or ghost of a real issue.

These 5 mistakes are the most common ones. There are other symptoms of how managers use data incorrectly to the detriment of their organization and the people. The antidote for each of these problems is to make sure managers are educated on these flaws and modify their behaviors to avoid the pitfalls.

The preceding information was adapted from the book Leading with Trust is like Sailing Downwind, by Robert Whipple. It is available on http://www.leadergrow.com.

Robert Whipple is also the author of The TRUST Factor: Advanced Leadership for Professionals and, Understanding E-Body Language: Building Trust Online. Bob consults and speaks on these and other leadership topics. He is CEO of Leadergrow Inc. a company dedicated to growing leaders.


Reboot Every Day

June 17, 2012

Surprise! This article has nothing at all to do with computers or technology. Rather, it is about the human condition and spirit.

Every day, there is a special moment for each of us. It is that first instant when we become conscious after sleeping. We may have been dreaming or not; that does not matter. That very first blink of consciousness is something marvelous. Here is what I experience, and I am sure it is the same for you.

Blink. “Oh, I am here. Where is here? Who am I? What is my role here? Am I happy or sad? Do I hurt? What’s on my agenda today?”

Crossing that demarcation line between the unconscious and the conscious world is a kind of “rebooting” activity where we spend just a second or two getting our bearings.

In that instant of first awareness, we each have a wonderful opportunity. We have the power to choose. Whatever external or internal conditions are facing us, we each have the opportunity to decide how to respond to them. I believe that is what separates humans from other species: the power to choose our attitude.

I believe that the freedom to choose my own quality of life is amazingly liberating. I may be waking up as a prisoner of war or a person with a terminal disease or a hangover. In that first blink, I may realize that I have been out of work for six months, or perhaps yesterday I won the Nobel Peace Prize or an Olympic Gold Medal.

Regardless of the miserable or delightful circumstances, I remember my conditions as my brain reboots each morning. I still have the opportunity to choose how I wish to respond to those conditions. Unfortunately, most of us quickly jump to a fatalistic view that we are powerless to modify the quality of life, which is where the opportunity lies.

If we can push the “pause” button in our thinking long enough to suspend the pain or the negative things that are lurking in a corner of our brain to ruin our day, then we might consider the options. For example, this morning, I awoke at 2:30 a.m. with a stabbing pain in my right little toe. The pain actually woke me up. There was no reason why there should have been a pain in my toe today. I did not stub it or drop something on it, but there it was, big as life.

I recall lying there trying to figure out what the pain was. Since I had no clue, my brain continued with the rebooting exercise as I began to think about the good and not-so-good things that awaited me today. When a computer reboots, it does not have options for changing attitudes. It just goes through the programs and determines the health of the system with no ability to change its response to certain failures or bugs.

I decided to let my human side take over and process today in a positive light. After all, I did wake up, so I began to marvel over the choices I had today and the multitude of things I could get done. For example, I could create this article, and though I am not revealing any rocket science here, perhaps my thoughts translated through this medium may be helpful to a few people. As a result, I would be using my energy as a positive force in the universe. What better way to start out a day?

Try to make your first moments of every day a special conversation with yourself. Think about the opportunities you have rather than the difficulties you face. I think there is some powerful magic we all share as part of the human condition. Of course, you can wallow in self pity or depression. It is your life to live. I hope you will use this reminder to make a positive contribution to your mental process right now, and especially tomorrow morning.