Is the temperature in the room where you sit with your computer always exactly the same? Does it always take the same amount of time to drive to work? Does the sun rise and set at the same time each day? There is variation, right? That is the way the world is, and yet leaders often pretend the business world is not that way. The delusion that it is a black and white world and that any single number (e.g. last quarter profits) represents reality is a source of a great deal of foolishness. Too many leaders try to manage in the 21st century with 18th century thinking. The new leader must not do so.
Leaders who disregard variability are much like B.F. Skinner’s pigeon in the famous Skinner box. When pellets of food were presented at random, the pigeons foolishly linked the food with various body movements. If their heads were rocking when the pellet appeared, they rocked their heads. If they were turning around they turned around. These movements had nothing to do with the food. However, the world is full of leaders who are dancing around like pigeons. They are operating in a world of superstition.
When a leader fails to understand variation, or fails to even acknowledge its existence, these kinds of mistakes are made:
- Seeing trends when there are actually no trends
- Missing trends when there are real trends
- Leaping to blaming individuals or groups of individuals who had no real influence
- Giving credit to individuals or groups who were simply lucky
- Launching disruptive programs for improvement when no improvement is needed
- Failing to identify areas for improvement when improvement is needed
The leader who fails to recognize the importance of variation is likely to leap to conclusions from too little data. Can you predict the temperature of your room three hours and twenty minutes from now, based on one measure, such as the temperature right now? Can you specify to the second, or even the minute, how long your drive to work will take tomorrow based on the time it took this morning? Unlikely. Can you predict what next quarter’s profit will be based on the last quarter? No. You cannot interpret such numbers without understanding variation. One number by itself is never enough.
The new leader must place as much emphasis on the statistics of variation as on the profit and loss statement. In any business there are key processes which determine whether customers will pay for the product or service, and the new leader must be a wise student of those processes. The new leader cannot afford to become a superstitious pigeon. If the business requires a telephone response, and the length of time required for an answer determines customer satisfaction, then the leader must understand those processes well in order to determine if, and when, those processes require change. The new leader cannot know when changes need to be made without understanding variation. Superstition costs money.
