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Metrics & Statistics Don't Have to be Scary v3

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Presented by Mark Graban, author of
"Measures of Success: React Less, Lead Better, Improve More"

Happy Halloween! Do metrics and charts haunt your dreams? Does your organization jump or scream "Boo!" every time a metric is worse than the day, week, or month before? Are you terrified by explaining every up and down in the metric?

To celebrate this scary day, Mark Graban, a Senior Advisor at KaiNexus, will give a presentation that will help you and your leaders stop being metrics zombies who stagger around saying "Brains! Above average data point.... brains...."

In all seriousness, Mark will share some proven and time-tested methods that are, contrary to popular opinion, not older than Dracula. Are these methods magic and witchcraft? No, they're based on simple statistical methods that anybody can learn and use, even Frankenstein's monster.

In this webinar, you will learn:

How to replace your orange and black -- I mean red and green -- boo-wling charts with Process Behavior Charts

How Process Behavior Charts helped our director of marketing and CEO stop howling at the moon every time a metric was a little bit worse

How you can apply these decidedly non-spooky methods in any type of organization

Published in: Business
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Metrics & Statistics Don't Have to be Scary v3

  1. 1. Metrics & Statistics Don't Have to be Scary Mark Graban Mark@KaiNexus.com @MarkGraban Matt Banna Matt.Banna@KaiNexus.com @MattBanna
  2. 2. The Hellish Webinar Boogistics ! Presentation (45 minutes) " Or until the end of time ! Q&A (10 minutes) ! Use the GoToWebinar Meeting Panel to submit a question at any time – if you dare! ! A ghoul will deliver recording link & slides via email " Check your spooky spam folder ! Also – see the “Handouts” feature and Chat box
  3. 3. Reds…. Reds!!!!
  4. 4. Must root cause your reds…
  5. 5. This is scary to me Why? Not every red is worth reacting to in that way…
  6. 6. I vant to suck your time…
  7. 7. The only ones who don’t care about time…
  8. 8. Every metric has variation Even if that’s frightful to think about…
  9. 9. KaiNexus Webinar Registrations Chart compiled in KaiNexus software
  10. 10. How many trick or treaters should I plan for?
  11. 11. # of Trick or Treaters Count 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
  12. 12. Did You Say “Count?” Ah ah ah!
  13. 13. # of Trick or Treaters Count 1980 36 1981 40 1982 42 1983 35 1984 43 1985 46 1986 38 1987 43 1988 45 1989 42 1990 47
  14. 14. Do we have a crystal ball?
  15. 15. Not a column chart!!!!
  16. 16. 1. Are we achieving our target or goal? 2. Are we improving? 3. How do we improve? Do we have a crystal ball?
  17. 17. A run Chart Can Help - 5 10 15 20 25 30 35 40 45 50 198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003 Run Chart (Trick or Treaters)
  18. 18. Three Key Questions 1. Are we achieving our target or goal? 2. Are we improving? 3. How do we improve?
  19. 19. Can we predict future performance?
  20. 20. Signals vs. Noise “While every data set contains noise, some data sets may contain signals. Therefore, before you can detect a signal within any given data set, you must first filter out the noise." "Process Behavior Charts"
  21. 21. Process Behavior Charts Help - 10 20 30 40 50 60 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 X Chart (# of Trick or Treaters) Lower Natural Process Limit Upper Natural Process Limit Average
  22. 22. The Math Zone! Enter if you dare…
  23. 23. Is the Math Scary? It’s not scary… but you have to dare to enter…
  24. 24. Calculate Mean & Moving Ranges ! Calculate mean of the X baseline data points ! Calculate the moving range of the X-1 data points " =ABS(B3-B2) 26 Data Moving Range (MR) 1980 36 1981 40 4 1982 42 2 1983 35 7 1984 43 8 1985 46 3 1986 38 8 1987 43 5 1988 45 2 1989 42 3 1990 47 5
  25. 25. Calculate Natural Process Limits ! Calculate “MR-bar” " Average of the baseline ! Calculate the Limits " Lower = Average – 3*(MR bar)/1.128 " Upper = Mean + 3*(MR bar)/1.128 27 Data Moving Range (MR) Average MR Bar Lower Natural Process Limit Upper Natural Process Limit 1980 36 41.55 4.70 29.04 54.05 1981 40 4 41.55 4.70 29.04 54.05 1982 42 2 41.55 4.70 29.04 54.05 1983 35 7 41.55 4.70 29.04 54.05 1984 43 8 41.55 4.70 29.04 54.05 1985 46 3 41.55 4.70 29.04 54.05 1986 38 8 41.55 4.70 29.04 54.05 1987 43 5 41.55 4.70 29.04 54.05
  26. 26. Draw the X Chart - 10 20 30 40 50 60 198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003 X Chart (# of Trick or Treaters) Lower Natural Process Limit Upper Natural Process Limit Average
  27. 27. Draw MR Chart & Look for Signals ! Calculate MR Chart Upper Limit " UCL = MR-bar * 3.27 29 - 5 10 15 20 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 MR Chart
  28. 28. I’m David Pumpkins and My Charts Are Gonna Scare the Hell Out of You…
  29. 29. I’m just trying to wrap my head around…
  30. 30. I’m David X Chart Pumpkins, Man!
  31. 31. And the other chart is???
  32. 32. Part of It!!!
  33. 33. Look at the Complete PBC Pairing - 10 20 30 40 50 60 198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003 X Chart (# of Trick or Treaters) - 10 20 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 MR Chart
  34. 34. Rules for Detecting a Signal Rule 1 also applies to the MR Chart
  35. 35. A Spike in Candy - 10 20 30 40 50 60 70 198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003 X Chart (# of Trick or Treaters) - 10.00 20.00 198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003 MR Chart
  36. 36. A Sad Decline in Treats - 10 20 30 40 50 60 70 198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003 X Chart (# of Trick or Treaters) - 5.00 10.00 15.00 20.00 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 MR Chart
  37. 37. "Why were leads down last month?"
  38. 38. “I don’t know… let me look into it.”
  39. 39. ”Ready or not… Here… we… Chart?”
  40. 40. How Much David X. Chart Pumpkins is in This?
  41. 41. - 2 4 6 8 10 12 14 M ar-14 Apr-14 M ay-14 Jun-14 Jul-14 Aug-14 Sep-14 O ct-14 N ov-14 D ec-14 Jan-15 Feb-15 M ar-15 Apr-15 M ay-15 Jun-15 Jul-15 Run Chart (Monthly Tier 1 Leads)
  42. 42. Don't waste people's time "writing fiction"
  43. 43. - 2 4 6 8 10 12 14 M ar-14 Apr-14 M ay-14 Jun-14 Jul-14 Aug-14 Sep-14 O ct-14 N ov-14 D ec-14 Jan-15 Feb-15 M ar-15 Apr-15 M ay-15 Jun-15 Jul-15 Run Chart (Tier 1 Leads)
  44. 44. - 5 10 15 20 25 M ar-14 Apr-14 M ay-14 Jun-14 Jul-14 Aug-14 Sep-14 O ct-14 N ov-14 D ec-14 Jan-15 Feb-15 M ar-15 Apr-15 M ay-15 Jun-15 Jul-15 X Chart (Tier 1 Leads)
  45. 45. “But I don’t like those limits, they’re too wide…”
  46. 46. - 5 10 15 20 25 M ar-14 Apr-14M ay-14 Jun-14 Jul-14 Aug-14 Sep-14 O ct-14 N ov-14 D ec-14 Jan-15 Feb-15M ar-15 Apr-15M ay-15 Jun-15 Jul-15 Aug-15 Sep-15 O ct-15 N ov-15 D ec-15 X Chart (Tier 1 Leads)
  47. 47. - 5 10 15 20 25 30 35 40 45 50 CApr-14M ay-14Jun-14Jul-14Aug-14Sep-14O ct-14N ov-14D ec-14Jan-15Feb-15M ar-15Apr-15M ay-15Jun-15Jul-15Aug-15Sep-15O ct-15N ov-15D ec-15Jan-16Feb-16M ar-16Apr-16M ay-16Jun-16Jul-16Aug-16Sep-16 X Chart (Tier 1 Leads)
  48. 48. - 10 20 30 40 50 60 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 X Chart (Tier 1 Leads)
  49. 49. (20) (10) - 10 20 30 40 50 60 70 80 90 M ar-14M ay-14 Jul-14Sep-14N ov-14 Jan-15M ar-15M ay-15 Jul-15Sep-15N ov-15 Jan-16M ar-16M ay-16 Jul-16Sep-16N ov-16 Jan-17M ar-17M ay-17 Jul-17Sep-17N ov-17 X Chart (Tier 1 Leads) Rule 2 Rule 1
  50. 50. Must root cause your reds…
  51. 51. Not every red is worth reacting to in that way… IMPROVE THE SYSTEM! DON'T OVERREACT!
  52. 52. Some Greens ARE Worth Reacting To… SIGNALWHAT CHANGED?
  53. 53. Noooo! The horror! ! Overreacting to noise ! Missing signals ! Confusing Natural Process Limits with a target ! Using a calculated Standard Deviation to calculate the limits…
  54. 54. All in on David X Chart Pumpkins…
  55. 55. I’m Crazy… for Process Behavior Charts!
  56. 56. Any Questions???
  57. 57. Other Resources KaiNexus.com/webinars Blog.KaiNexus.com
  58. 58. Mark’s Previous Webinar on This Topic
  59. 59. Next Webinar – Wednesday November 28 http://www.kainexus.com/webinars How One Community Hospital is Creating a Culture of Continuous Improvement Mike McGowan Director, Process Excellence at Marietta Memorial Hospital
  60. 60. Mark Graban Mark@KaiNexus.com @MarkGraban Matt Banna Matt.Banna@KaiNexus.com @MattBanna Any Questions??? ! Web: ! www.KaiNexus.com ! www.MeasuresofSuccessBook.com ! Social Media: " www.twitter.com/kainexus " www.linkedin.com/company/kainexus " www.facebook.com/kainexus
  61. 61. Credits Special thanks to all the people who made and released these awesome resources for free: ! Presentation template by SlidesCarnival ! Photographs by Unsplash

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