The Science Behind Guestimation - Aditya Yadav


Published on

The Science Behind Guestimation - Aditya Yadav

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

The Science Behind Guestimation - Aditya Yadav

  1. 1. “Running an Agile Fortune 500 Company”Aditya Yadav,*
  2. 2. **A Typical Global Company*Fortune 500/1000*200 Divisions*40 Countries*25000 Employees
  3. 3. @ Acme Inc.*
  4. 4. **Original Question “We need accurate Strategiesand hence should we not have the mostaccurate data and calculations?”*The Correct Question - “One of the thingsabout Complex Systems is that third and fourthdecimal place calculations don’t help than justcosting a lot of time and effort without anybenefit. (Diminishing Returns). Lets see howwe need to work in a ComplexSystem/Environment. Shall we?”
  5. 5. And The Philosophy Behind The Answer*
  6. 6. **India has 1.26Billion people*How many years will it take to have ONE INDIAONE LARGE FAMILY?
  7. 7. **Assume India has 630m Couples.*Assume Everyone gets married at 25 years of age andhas exactly 2 Children*Assume No One Marries Within the Family, or morethan once.*Round 1: 2 siblings get married and hence 3 familiesmerge into one. And the number of such families is630m/(2+1)*Round n: 2^n+1 families merge and 630m/(2^n+1) suchfamilies exist*Answer: # years = 25yrs * Log[Base2]( (630m)^0.5-1) =366 yrs
  8. 8. ** Top Consulting Companies love Guestimating!!!* While most Managers in most companies get paralyzed without enough data or their futile obsession with precisionand accuracy.* A Guestimate is way better than a blind shot in the dark. 366 years as our Answer is a good number to start with.* If you are dealing with 5 issues, it is better to have guestimates for all of them rather than not doing anything at allor taking random shots in the dark or endless arguments where no one has any clue. Or commissioning a 3 yearsfact finding mission to mars to get the estimates.* We were all taught in School “All Indians are my brothers and sisters” Well here we have it. This is the mathsbehind that statement. Assuming we start now, we will all be one Large Family in about 366 years.* Empirical Observation: Most High Level Strategies wont’ change unless there is an order of magnitude difference incalculations.* Ask yourself* Do we need to differentiate between 365.1386 and 365.1299 years?* Does our Vision/Strategy change if the answer was 200 or 600 years?* But if the answer was an order of magnitude higher or lower i.e. 3660 years or 37 years then probably our HighLevel Strategy would be different.* Again if we have guestimates for (i) average income, (ii) average agri-production, (iii) average consumption percapita. I think we would be reasonably be able to Strategize about Self Sufficiency as a Nation and High LevelStrategies to Increase Self Sufficiency* Some people would actually ask for a 4 year Statistical Survey at a cost of $100m to be conducted before doinganything.* A Strategist would gather facts and data, create guestimates and create a Proposed High Level Complex SystemStrategy by the end of the week.
  9. 9. *Aditya!!!