Abstract
In most businesses today managers are hostages to two types of information: average data and anecdotaI data. The averaged information comes in the form or corporate, business unit, product group, or customer sector data identifying revenues, costs, contribution, and assets regarding actual performance and budgets. Perhaps they a1so receive market data segmented the same way on share, growth, and competitive activity. Armed with this information executives are asked to improve underlying performance. But, since this information reflects an average across an entire business product, or customer group, it provides few clues as to what is driving performence. As a consequence, management turns to anecdotes learned from the field. At least this is specific data on a customer or marketing campaign, but it is usually gathered selectively and accompanied by stronghy held beliefs. How can executives objectively isolate the critical cause and effect relationships in a business? Managing by anecdote is no better than managing by averages.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Note
Scheinkman, J.A., and Woodford, M. (1994). ‘Self-organized Criticality and Economic Fluctuations’ American Economic Review 84 (May): 417–21.
Copyright information
© 2001 Arnoldo C. Hax and Dean L.Wilde II
About this chapter
Cite this chapter
Hax, A.C., Wilde, D.L. (2001). Managing by Averages Leads to Below Average Performance: The Need for Granular Metrics. In: The Delta Project. Palgrave Macmillan, London. https://doi.org/10.1057/9780230288089_11
Download citation
DOI: https://doi.org/10.1057/9780230288089_11
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-42736-9
Online ISBN: 978-0-230-28808-9
eBook Packages: Palgrave Business & Management CollectionBusiness and Management (R0)