It may seem something of an oxymoron to suggest creativity and strategic thinking fit with statistical models. This article seeks to demonstrate how statistical models can help executives improve their strategic thinking.
Creativity, Strategic Thinking and Statistical Models
Creativity, Strategic Thinking
and Statistical Models
By James Neils
It may seem something of an oxymoron to suggest creativity and strategic thinking fit with
statistical models. Yet, any time an executive beings the process of strategic thinking it
should prompt a willingness to accept different methodologies and/or ideas. While the
planning process may diminish the use of a novel approach, executives should not impose
limits on creative thinking while developing a strategic plan. This article seeks to
demonstrate how statistical models can help executives improve their strategic thinking.
Because strategic thinking is a learned skill, like any learning to improve competency
requires repetitive practice. While some may only engage in strategic thinking on major
issues, improving strategic thinking can also be accomplished by using any issue
regardless of the size. Thus, staff aspiring to be executives can also practice strategic
thinking regardless of their current position or decision making responsibility.
In many ways practicing strategic thinking is similar to warm up prior to any physical
activity. Few would expect anyone to complete a triathlon without training. Athletic training
tends to be focused, repetitive and oriented to achieve the larger goal. In the same way,
learning to think strategically requires training and conditioning the thought process. While
seminars can teach a process, it is the constant "reps" by the executive that conditions the
brain to be creative and to think strategically.
Strategic thinking involves some measure of creativity as well as practice, regardless of
how complex the process might be. Sometimes learning and applying simple concepts will
more easily invigorate the creativity useful for strategic thinking than complex analysis and
multiple measurements which simply adds data to consider. This is why, although an
unlikely source of inspiration, statistical models can be sued to add a measure of creativity
to the thinking process.
Contrary to what some executives might think simple statistical concepts can be used in a
variety of management situations. Statistical analysis is not always about the task of
"number crunching." Sometimes it is about statistical concepts to view a problem or find a
solution. Strategic thinking is partially about viewing an issue from a different perspective
and statistical models provides an opportunity to do just that. There are several statistical
concepts that require little expertise, have already proven helpful in a variety of fields, and
are easily adaptable for use in association management.
While some association executives may shy away from the notion that statistical models
might enhance creativity and strategic thinking, the effort here is to demonstrate how
statistical models can contribute. Presented are three simple statistical concepts that not
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only can be used in the daily management of an association, but also provide an unusual
approach to problems and therefore offer a means to enhance strategic thinking.
The 80/20 Rule
Used primarily in business, there is a wonderful statistical concept known as the 80/20
Rule. In the late 1890's Italian political economist Vilfredo Pareto developed a mathematical
formula that today is called Pareto's law, but more commonly referred to as the 80/20 Rule.
Researching the distribution of wealth he found that throughout history, in every society,
eighty percent of the wealth was controlled by twenty percent of the population.
Since publication, its application spans business, money management, manufacturing,
customer service, human resources and even the management of lifestyles. There are
numerous seminars, blogs and conferences where participants review and share its
One reason this rule has been embraced by Business is due to its ability to efficiently
measure a wide-range of issues. In the business setting the 80/20 rule states generally
that 80% of profits will come from 20% of the clients, 80% of the problems will come from
20% of the customers and 20% of the personnel will consume 80% of human resources
Apply that same statistical approach to association management and Pareto's law would
suggest 80% of volunteers come from 20% of membership, 80% of referrals come from
20% of the members, 80% of members will use 20% of the available benefits and/or 80% of
the board members will function well on the board while 20% will not. The rule’s usefulness
can be tested on just about any management issue.
Consider conference registration, does it fit the 80/20 Rule model? The model predicts 80%
of the registrations should occur prior to or on the deadline and the remaining 20% after the
deadline. The rule is not designed to be absolute, rather a quick guide to compare against
actual measurement. Depending on the size of the variance, if performance is less than
eighty percent, then it might be a reason to consider a brief review and use the rule as a
But is this statistical concept strategic? The application of the 80/20 Rule to registration
may not be strategic. Learning how to apply this conceptual model in daily management
and being prepared and skilled to use it on larger situations or problems can be.
What, for instance, makes an Association unique? Applying the 80/20 Rule can help to
focus thinking on the distinguishing features. Pareto's law suggests that 80% of what any
association does is similar to other associations, while 20% is unique. Most associations
collect fees, have meetings, offer vendor products, have web sites, seek to expand in some
ways and have boards that change routinely. Most of the staff’s activity is in support of
these common functions.
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There are sure to be executives who would challenge the application of this 80/20 Rule to
association work. However, "Best Practices", reflects the kind of commonality the 80/20
Rule addresses. "Best Practices" is the acknowledgement that common procedures and
business practices exists. Further, there is a common desire across a variety of people to
establish procedures and practices into the lexicon of association management.
Being able to recognize the common 80% as well as focus in on the unique 20% of any
issue or problem is strategic in thinking. Consider an association that depends on
charitable funding as its primary source of revenue. Learning that 80% of revenue comes
from 20% of the benefactors would be a good thing, even though having 80% of the
funding come from 20% may not be. An executive and/or board might alter the funding
campaign if it found the 80/20 Rule held true for their revenue sources.
This simple concept has a way of putting many things into perspective. Consider any
number of association issues, whether it is staffing or conference programs or funding, and
apply the 80/20 Rule. Imagine teaching staff the 80/20 Rule and having it as a common
benchmark for their projects or decisions.
The issue is not how complicated or simple a conceptual model is rather how it can be
applied. The 80/20 Rule may not be applicable in every situation and is not designed to be,
but its use might persuade an executive to think of the implications. If membership
campaigns were consistently supported by the same twenty percent of the members would
it cause a rethinking of the "reward" system, if there is one? Would it have any affect on
how these members were viewed by the board or staff? Are there characteristics of the
twenty percent that can be identified and used as a means to find others who are not active
but could be? What would happen if this twenty percent began to decrease either as a
result of ending careers or no longer feeling appreciated for their efforts?
The 80/20 Rule is a useful tool to improve strategic thinking because of its simplicity. It is a
quick easy measurement, against which actual data can be compared. As Business has
discovered its range of application is what makes it an important tool for any executive.
The next two models involve the use of common and simple well-known concepts but take
a slightly different direction. Although statistical analysis is generally about numbers,
converted graphically, numbers can seem to take on magical qualities. Instead of rows and
columns of seemingly indistinguishable numbers, a graphic display conveys a meaning all
those numbers never could. Further, viewing and thinking about visual references add a
dimension that reading numbered text does not. Since viewing objects stimulates different
parts of the brain than reading and reasoning with numbers, graphic displays serve as
another way to stimulate creative thinking.
Among the more interesting statistical models, simply because it can be so easily applied to
nearly all management issues, is Gaussian distribution, better known as the bell-shape-
curve. Named after Carl Friedrich Gauss, the bell-shape-curve is among the more widely
known statistical concepts and hopefully, executives have learned to incorporate it into their
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thinking and decision-making processes. Rather than discuss the technical aspects of
what produces the bell-shaped-curve, the focus here is its use for strategic thinking.
The first introduction to the bell-shape-curve for most occurred early on in education to
demonstrate test performance and distribution. Its use illustrated there would be some who
scored well, some who scored poor and the majority who scored somewhere in the middle.
As many can attest, the typical distribution looked like this.
Whether it is measuring membership, program participation rates, volunteerism or
registration, the bell-shape-curve concept can be used in association management and
helpful to improve thinking strategically.
For example, an association's conference planner would like to decrease the number of
members registering late or on-site for the national meeting and proposes the association
set a new deadline. Here is an opportunity to think strategically and for the executive to
practice identifying all the components involved in the decision. This can be a learning
experience for staff as well as an executive. This decision is more than just about a
deadline, but about all of the issues involved and what it takes and the costs to set a new
Chief among these costs might be an often-overlooked strategic resource of any
association, staff time. A lot of staff time might be consumed in meetings prior to a decision
and later to prepare a presentation for the board, write new policy, update conference
information, change the web site and/or deal with questions or complaints. Viewing staff
time as a strategic resource is one way an executive can learn to become more strategic in
their thinking and will certainly help when dealing with the board and members who
routinely see staff as being available and without cost.
Apply the Bell-Shape-Curve concept to the registration issue discussed earlier. Generally,
the pattern for member registration should follow the bell curve model, a few sign-up quite
early, most around the deadline and then, as a percentage of the total it should decrease
as the conference draws near. Additionally, the 80/20 Rule would imply that 80% of the
members have registered by the deadline. Plotting the registration frequency across time
an executive could "see" whether registration fits a typical bell curve model and whether
registration conforms to or varies from the 80/20 Rule.
Compare the two illustrations below. They represent registration patterns displayed as bell
curve models and the example of proposing a change in the registration deadline. In both,
the solid vertical line represents the existing deadline and the dashed line the proposed
new deadline. The conference start date is to the left and registration opening date to the
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right side for each curve. It certainly does not appear in either case that a change in the
deadline would significantly alter late registration numbers, even though clearly one of the
registration patterns is better than the other.
Conference begins Registration Opens
Suppose instead of the data being displayed graphically it was displayed as a list of dates
with corresponding number of registrations per date such as this table.
May 8 60
May 9 165
May 10 190
May 11 180
May 12 175
A list and corresponding graphic display will have the same information, but visually as a
bell curve numbers take on a different quality and can illustrate meaning even without the
viewer knowing the actual figures. It is the ability to understand and to interpret through
visual cues that enhances the thinking process.
The power of the bell-shape-curve comes from its ability to stimulate intuitive thinking.
Viewing the distribution patterns in the next example, which one of the two curves
represents greater concentration of registrations near the deadline? Not only is it apparent
which graph it is, but there seems little need to know the numbers in order to make a
There are a surprising number of management issues where a bell-shaped-curve could be
used to measure performance. For example, the two graphs could represent the results of
a campaign to inform members about benefits, or responses before and after a web site
was updated. It seems the issue is not whether this concept is useful, rather whether
executives and aspiring executives know how to use the concept.
In addition to the bell-shape-curve there is another easy to use statistical concept, the bull's
eye which when combined with the bell-shaped-curve can promote innovative thinking.
The Bull's Eye
While most people are familiar with a target's practice bull's eye, the idea it could be used
in management while at first may seem unusual, actually is not. To graphically depict how
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the University of Wisconsin at Stout was “people centered” Dr. Charles Kruger developed a
bull’s eye model, (www.uwstout.edu/ctem/ppc/bullseye.html). To demonstrate to
senior Boeing officials how well Boeing’s Space Transportation Systems group was
meeting its customer’s needs and contributing to the company, the group used a bull’s eye
model, (www.stsc.hill.af.mil/.../1997/08/seicmm5.asp). To identify how venture
capitalist would turn a charitable organization into a profitable business, they used several
models including the bull’s eye, (cvar.venturecapital.org/.../Charity/charity.html).
What is intriguing about the bull's-eye is how easily is can be applied in association
management as both a conceptual tool and a visual representation for measurement.
Consider what the bull's eye could represent: membership and distribution across various
categories of members. To demonstrate its use, let’s apply it to a fictitious association of
Each ring would represent a particular segment of the membership. The inner portion
represents the members who are most closely aligned to the mission and purpose of the
association: the tellers themselves. The first outer ring could relate to other bank
personnel and the final outer ring could correspond to providers of equipment or supplies
which bank tellers' use. This would then provide a visual reference of membership
distribution in a way significantly different from the typical numeric tally of members in the
various categories and permits visual cuing that simple numbers do not.
It is clear which group forms the "core" members of the association membership. For a
membership recruitment campaign it would be easy to help existing members focus on
whom they should recruit. Imagine the impact for a committee or staff if new members
were positioned onto the target. It would visually reference whether the campaign was
"centered" or just somewhere on target.
Its impact can go far beyond acting as a simple reference. Similar to a scatter plot, it can
depict distribution. By dividing the bull's eye into quadrants we can see that it can clearly
provide a visual reference in membership categories and the following demonstrates how
powerful this visualization can be, even within just one segment of the membership
population. In this example, the bull's-eye displays just the bank tellers segmented by four
different types of banks to satisfaction with the association and years as a member. The X
axis represents years as a member while the Y axis represents satisfaction with the
association. While it is possible, this particular example would not display a member who is
totally dissatisfied with the organization and have a negative satisfaction score. Also, the
midpoint is zero for both axis and values increase as distance from the center increases
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Private City Private Suburban
+10 0 +10 Member satisfaction
Branch/Main City Branch Suburban
Years as a member
This type of display could be completed for each member type or for all combined members
on one display. Yet, while this is all possible and could be useful, a bull's eye does not
seem to posses the creative qualities that would make it helpful for strategic thinking.
Add a little Creativity
Suppose, however, the perspective of the bull’s-eyes would change and instead what is
possible to present is not a flat at all? Imagine, instead of looking at this as a simple flat
bull's-eye, it is viewed from the top view of a three dimensional, 360°, bell-shape-curve.
The idea that a bull's-eye could represent a bell-shape-curve certainly does have creative
qualities. Further, because of the Internet and shareware, the statistical software that can
produce this graphic display is free and available to anyone.
Statisticians actually combined the two concepts years ago and an entirely new field of
statistics emerged. With the advent of higher speed personal computers, the application
has become universal within certain fields, especially within statistics. Similar to the
representation of the bull's-eye most people view the bell-shaped-curve only on a single flat
plane. Since its general use in education was to represent a single application, scores for a
test, there was little reason to consider that it might have greater potential. What happens
when these two concepts are combined with the notion of multi-dimensions is not only
interesting it can useful in management decision making.
A representation by Richardson is perhaps the best display of the two statistics and the
concept of multi dimensional. Richardson's diagram helps to show not only the typical flat
display of the bell curve as it cuts through the middle of a bull's-eye but also how the
height, usually expressed as a measure of frequency, could elevate a bull's-eye.
Richardson's model also makes it possible to see the how many other dimensions could be
In school the bell curve was most often to report on one degree, such as test scores, rather
than included as part of a full range of possible student measurements. It could have just
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as easily been used to display comparisons for attendance, participation in extra-curricular
activities, ACT/SAT scores, or parental involvement. In other words, there could have been
a bell curve for a full 360° range of measurements. Imagine taking a range of
measurements within any association across members and visually displaying them on the
multi-dimensional combination of the bull’s eye and bell shape curve.
Let’s illustrate the power of combining these two simple statistical concepts and what can
be produced as it applies to association management. Remember the proposal on the
executive's desk to move a registration deadline? The association has registration data
and is now prepared to view, instead of numbers, a graphic display of just one quadrant,
the members who work in or supply private suburban banks, to see the registration pattern.
The purpose is to assist the executive, and staff, make the decision about whether it would
be helpful to move to a new registration deadline. The resulting graph below which is a
combination bull’s eye and bell shape curve displays intuitive meaning that numbers simply
After viewing this graph with minimum reference points and no numbers, as long as other
quadrants reported similar results, the Executive could be confident in making the decision
that there is little need or significant benefits to warrant moving the registration deadline.
Number of Registrations
Looking at the graph there is a lot of information being displayed simultaneously and yet at
the same time there is a simplicity that numbers could never achieve. There is not a single
number referenced on the chart, yet most executives and staff could not only interpret the
graph, but could make a decision as to whether it would be useful to move the deadline and
whether members might object to the move, particularly when a second quadrant is added
as seen below.
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Visual references are powerful cues in the thinking process and the reason speakers are
encouraged to use visual aids. Look at the difference between these two bell curves, one
illustrated earlier in flat mode and the corresponding partner in a partial bull's eye three-
Statistical models have the ability to transform numbers into meaning and add a measure
of creativity to strategic thinking.
The bull's eye may not initially seem creative or strategic but as a visual reference to
represent data, it can help develop more creative thinking especially when combined with
the bell shape curve. Imagine a presentation before a board with the registration graph to
explain the recommendation. These are not gimmicks but useful tools in being able to think
more strategically and with greater creativity. There is no denying that a bull's eye is a
simple concept as is a bell-shape-curve, yet they can produce powerful representations,
and that is what makes them so useful.
As these examples have hopefully demonstrated, statistical models can be used in
association management and be used by executives and others to improve strategic
thinking skills. Business has long used models and they do belong in association
management and should be in an executive's daily thinking and decision making skill set.
Whether executives choose to use the 80/20 Rule, the Bell-Shape-Curve or the three-
dimensional Bull's-eye in their work is a personal choice.
Models, including statistical models, can help an executive examine issues from various
perspectives and contribute a measure of creativity into the thinking process. With
powerful visual cues statistical models can play a role in the thinking process. As in any
learning, practice provides the opportunity to prepare strategic thinking for larger more
complex problems. Daily association management can provide the opportunities to
practice and executives can develop or improve the creativity needed for strategic thinking.
Current and future executives can expect greater emphasis will be placed on innovation,
strategic thinking and results. This will mean executives must expand their skill sets and be
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capable to accomplish what previous executives may never have thought possible. Many
people never considered a bell-shape-curve could be more than what they learned while in
school, yet someone did take the time to think that there could be more. As a result of their
creative thinking, the bell-shaped-curve model has changed forever. Whether association
executives will have that kind of influence on their respective associations is dependent
upon their willingness to consider different perspectives, to think about what could be and
have the confidence in their creative talent to achieve what others have not.
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