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Add You - Business Questions Your Performance Measures Should Answer
In our previous installments of medical billing and the electronic transmission of claims, we touched on the topic of trailer records and the importance of record hierarchy. In this installment we're going to take a detailed look at the claim level trailer record, which is the XA0 record.The XA0 record must be transmitted with each individual patient claim. If a patient has five items, or FA0 records, that have to be billed, then the XA0 record must give the totals for all those FA0 records, including totals for all other records attached to each individual patient. Let's go over each of the individual fields in the XA0 record.XA0 field 1, positions 1 - 3, is the record type. This field must be filled with XA0 or the claim will be denied. Also, this record must come after all C, D, E, F, G and H records for that particular patient.XA0 field 2, positions 4 - 5, are reserved and not supported. This is to hold consistent with the mapping for the CMNs which use these positions for the sequence number of the records.XA0 field 3, positions 6 - 22, is the patient ID. This must be the same patient ID that is transmitted in the CA0 record and all subsequent records that transmit patient information. If this number doesn't match, the claim will be denied.XA0 field 4, positions 23 - 24, is the CXX record count. This is the total number of C records that are being transmitted for that particular patient. In most claims, this is just the CA0 record, but if the CB0 and CB1 records are transmitted, then they have to be included in this count.XA0 field
This is basically a comparison between actual performance and targeted performance. But it's not quite as simple as that. Because business results are constantly affected day in, day out, as time goes by, this comparison can only be really valid if it takes into account the natural variation in results over time. This means that a simple comparison of actual performance for the year (such as the average number of orders per customer per month, rolled up into an annual statistic) compared to the target (of 20 orders per customer per month) is too simplistic. It doesn't take into account the very likely event that improvements may have happened within the last year, so it underestimates actual performance. A better analysis would be a run chart (1) that shows the real changes in the overall average as time goes by, and compares that latest overall average (the mean line in the run chart) with the targeted level.
ARE WE PROGRESSING TOWARD OUR TARGET?
This question requires a comparison quite similar to the question above: actual performance compared to targeted performance. But it's not just the comparison between the mean line and the target level that matters here, it's also a comparison of how the actual overall level (the mean line) is moving as time goes by. Is it moving closer to the target level, fast enough? If you relied just on monthly comparisons to target, you'd be mislead by the natural variation that happens from month to month. You need to see the big pic
Although the job market has improved over the past year, many employers are still reluctant to make a long term commitment to growing their employee rolls until it is clear that a solid economic expansion is underway. They need new staff to handle the increase in orders and customer demands but are loath to hire permanent workers who may have to be cut in a few months if business stagnates. Any reduction in force carries major headaches for a company: employee morale falls, lawsuits arise, precious time is eaten up in non-productive meetings, and severance packages cut into narrowing profit margins.Their solution is often to rely on temporary agencies to provide needed manpower without any precipitous long term commitment. It is estimated, by a well-regarded labor research group, that fully 25% of the jobs created during the past year have been temporary positions!How can this work to your advantage?Working for a temporary agency has some drawbacks but also a number of positive aspects.The primary negative is the lack of investment in your future. While the hourly wage may be similar, or even better, than a permanent employee would receive, you remain on the periphery of the company's organization. Temps are often assigned the more routine tasks which require less intensive training. This makes it more difficult for your competence to be recognized. You are not seriously considered for promotional opportunities nor invited to advanced training or management classes.It also has personal repercussions. You are uncertain how long you will be needed and ten
INTRODUCTION
The report design working group sat around the table, sifting through the draft strategic performance report to suggest how to make it more useful. Measure by measure they chatted and suggested and critiqued and debated: "this one would look better if it was a bar chart", "yeah, I like the three-dimensional bar charts", "we should add another line to this chart because it would be interesting to show", "it's pretty easy to get Excel to turn this one into a stacked bar chart, that way we could get more information onto it". Then someone asked: "hang on, what questions are we trying to answer with these measures anyway?", and there was dead silence.
ARE YOU USING THIS KIND OF PERFORMANCE INFORMATION?
Performance reports are most commonly filled with a combination of information like the following:
- tables of comparisons of this month with last month, this month with the same month last year, year to date with target
- the default bar charts that Microsoft Excel formats for you
- fancy three-dimensional, stacked bar charts
- other charts that are crowded with information that looks visually exciting and at best, might be interesting
- occasionally some short term trends, consisting only of 5 or 6 or barely a few more points of data
- commentary about project or initiative progress or milestone completion
How many of these kinds of information are in your performance reports? How much of that information is read, valued, validly interpreted, understood and applied to inform decisions? How aligned to your organisation's strategic, tactical or operational priorities is this information?
WHAT'S WRONG WITH THIS KIND OF PERFORMANCE INFORMATION?
If you answered these three questions with "quite a lot", "not very much of it" and "not very well", then you'd be fairly normal. Most organisations' performance reports are created with only a basic awareness of good business statistics and even less of an awareness of the business questions the report should answer.
Most of the information provided in these reports is in the form of "limited comparisons", to borrow a phrase from Donald Wheeler (1). Limited comparisons can't really answer any business question, because they are not a representative picture of the performance results they monitor. This is due to the fact that there is always natural variation from month to month, week to week, day to day, and 2 points of data can never tell you what amount of variation is normal versus abnormal.
What makes matters worse, is that often it seems this information is designed this way purely because it always has been. Rarely is the design of the information questioned or challenged. And rarer still, is the design of the information reviewed in the context of the business questions it must answer. Information design, particularly the visual design of quantitative information (Edward Tufte has written some amazing books on this very topic - see references 2, 3 and 4), is a real body of knowledge, linking statistical theory with cognitive theory to provide insights into how we can make information more useful and usable in decision making.
WHAT ARE THE RIGHT BUSINESS QUESTIONS TO ANSWER?
What is business performance management really about? Ultimately it's about business success, and providing the information to make the decisions that increase that success, now and into the future. Performance management is about three specific things. Firstly, it's about monitoring your business' actual progress toward the outcomes (and targets) implied by your business strategy. If one of those outcomes is to increase customer loyalty, then it's about monitoring how much customer loyalty you have as time goes by (such as the average number of orders per customer per quarter), and comparing this actual level of customer loyalty with the targeted level (say 20 orders per customer per quarter).
Secondly, business performance management is about knowing which of your initiatives or projects are working and not working in making those outcomes happen. If you have an initiative around developing a customer relationship management system to improve customer loyalty, then you would expect to see that customer loyalty increases the more the customer relationship management system is implemented and used. If you don't see a change in customer loyalty despite implement customer relationship management, then how can you say the system was working? You can't.
Thirdly, business performance management is about knowing why those things are working or not working so you can choose better things to do, or fix the things you are doing. Perhaps the customer relationship management system isn't impacting customer loyalty because customers are already happy with their relationships with you, but just feel your products or services aren't as relevant as they expected.
This description of business performance management suggests several specific questions are important in managing a business so it's success improves.
Have we achieved our target?
We monitor business performance so we can know when we are actually performing at the level we need to, or want to, perform at. Targets are the description of the "need to" or "want to".
Are we progressing toward our target?
Rather than just waiting to the end of the year, or the date we wanted to achieve the target by, monitoring continuously throughout that timeframe gives us more power to influence the end result.
Are their any unintended consequences of our actions?
Chaos theory, the butterfly effect, and system thinking all tell us that there will always be some kind of flow-on effect from our actions. These flow-on effects can be anywhere from small and insignificant, to shockingly dramatic.
Why are we getting the results we are getting?
This is a question that is seeking information about reasons. Of all the possible reasons that you are getting a particular performance result, which reasons are the main ones, those that have most of the impact? If you are getting a good result, then knowing these reasons helps you confirm what to celebrate and keep doing more of. If you are getting a bad result, then knowing these reasons helps you modify your course of action to turn the result around.
What is likely to happen in the future?
Predictive information is some of the most valuable information in business. While no information can really do the crystal ball thing, a really good understanding of drivers (or lead indicators) can certainly give some great clues about likely future results. Thus, you can prepare for the most likely outcomes, before they happen.
DESIGN YOUR INFORMATION TO ANSWER YOUR BUSINESS QUESTIONS
The types of information needed to answer these business questions are different for each question. And unless that information is designed with the question in mind, it's likely that you won't be able to answer the question, or if you do, it will suffer the risks of misjudgment.
One of the keys to designing the kinds of information that will support your judgment in answering these question is to start with identifying the type of comparison you are trying to make. What do you need to compare with what, in order to answer the question? Another key is to be familiar with the kinds of qualitative and quantitative analyses that can reliably make those comparisons for you. The following sections provide some examples of how these keys can be used to design information to answer the generic types of business questions above. HAVE WE ACHIEVED OUR TARGET?
This is basically a comparison between actual performance and targeted performance. But it's not quite as simple as that. Because business results are constantly affected day in, day out, as time goes by, this comparison can only be really valid if it takes into account the natural variation in results over time. This means that a simple comparison of actual performance for the year (such as the average number of orders per customer per month, rolled up into an annual statistic) compared to the target (of 20 orders per customer per month) is too simplistic. It doesn't take into account the very likely event that improvements may have happened within the last year, so it underestimates actual performance. A better analysis would be a run chart (1) that shows the real changes in the overall average as time goes by, and compares that latest overall average (the mean line in the run chart) with the targeted level.
ARE WE PROGRESSING TOWARD OUR TARGET?
This question requires a comparison quite similar to the question above: actual performance compared to targeted performance. But it's not just the comparison between the mean line and the target level that matters here, it's also a comparison of how the actual overall level (the mean line) is moving as time goes by. Is it moving closer to the target level, fast enough? If you relied just on monthly comparisons to target, you'd be mislead by the natural variation that happens from month to month. You need to see the big pict
You may have heard that the best promotional products for online entrepreneurs are those that can be delivered electronically. People shopping online, the traditional wisdom goes, are an impatient lot. They want immediate gratification. That means that your online promotional products should be those that can be downloaded – free software, e-books and the like. Rubbish! The truth is that online shoppers like a free promotional gift as well as the next person, and are no more focused on immediate gratification than the bloke who runs down to the nearest high street store to buy something because he can’t wait for it to be delivered. Your online promotional products and items don’t need to be something that can only be delivered via modem in order to be effective. Here are five ways of using promotional gifts and products to boost online sales.1. Say Thank You with promotional gifts! Pack a free gift with every order. If you sell products online, it doesn’t take much to include a free printed pen or pad of sticky notes with every order that you ship. It’s a tradition in the catalog sales world that translates well to online selling, and customers always appreciate a little thank you for their business.2. Encourage your customers to share! Give your customers an incentive to share your site with others. Offer a special gift to those customers who refer new customers. It only takes a very simple bit of tracking software to track referrals. It can be easily done with a “Recommend us!” button or email program. When one of those referred by an existing customer makes a p
Most of the information provided in these reports is in the form of "limited comparisons", to borrow a phrase from Donald Wheeler (1). Limited comparisons can't really answer any business question, because they are not a representative picture of the performance results they monitor. This is due to the fact that there is always natural variation from month to month, week to week, day to day, and 2 points of data can never tell you what amount of variation is normal versus abnormal.
What makes matters worse, is that often it seems this information is designed this way purely because it always has been. Rarely is the design of the information questioned or challenged. And rarer still, is the design of the information reviewed in the context of the business questions it must answer. Information design, particularly the visual design of quantitative information (Edward Tufte has written some amazing books on this very topic - see references 2, 3 and 4), is a real body of knowledge, linking statistical theory with cognitive theory to provide insights into how we can make information more useful and usable in decision making.
WHAT ARE THE RIGHT BUSINESS QUESTIONS TO ANSWER?
What is business performance management really about? Ultimately it's about business success, and providing the information to make the decisions that increase that success, now and into the future. Performance management is about three specific things. Firstly, it's about monitoring your business' actual progress toward the outcomes (and targets) implied by your business strategy. If one of those outcomes is to increase customer loyalty, then it's about monitoring how much customer loyalty you have as time goes by (such as the average number of orders per customer per quarter), and comparing this actual level of customer loyalty with the targeted level (say 20 orders per customer per quarter).
Secondly, business performance management is about knowing which of your initiatives or projects are working and not working in making those outcomes happen. If you have an initiative around developing a customer relationship management system to improve customer loyalty, then you would expect to see that customer loyalty increases the more the customer relationship management system is implemented and used. If you don't see a change in customer loyalty despite implement customer relationship management, then how can you say the system was working? You can't.
Thirdly, business performance management is about knowing why those things are working or not working so you can choose better things to do, or fix the things you are doing. Perhaps the customer relationship management system isn't impacting customer loyalty because customers are already happy with their relationships with you, but just feel your products or services aren't as relevant as they expected.
This description of business performance management suggests several specific questions are important in managing a business so it's success improves.
Have we achieved our target?
We monitor business performance so we can know when we are actually performing at the level we need to, or want to, perform at. Targets are the description of the "need to" or "want to".
Are we progressing toward our target?
Rather than just waiting to the end of the year, or the date we wanted to achieve the target by, monitoring continuously throughout that timeframe gives us more power to influence the end result.
Are their any unintended consequences of our actions?
Chaos theory, the butterfly effect, and system thinking all tell us that there will always be some kind of flow-on effect from our actions. These flow-on effects can be anywhere from small and insignificant, to shockingly dramatic.
Why are we getting the results we are getting?
This is a question that is seeking information about reasons. Of all the possible reasons that you are getting a particular performance result, which reasons are the main ones, those that have most of the impact? If you are getting a good result, then knowing these reasons helps you confirm what to celebrate and keep doing more of. If you are getting a bad result, then knowing these reasons helps you modify your course of action to turn the result around.
What is likely to happen in the future?
Predictive information is some of the most valuable information in business. While no information can really do the crystal ball thing, a really good understanding of drivers (or lead indicators) can certainly give some great clues about likely future results. Thus, you can prepare for the most likely outcomes, before they happen.
DESIGN YOUR INFORMATION TO ANSWER YOUR BUSINESS QUESTIONS
The types of information needed to answer these business questions are different for each question. And unless that information is designed with the question in mind, it's likely that you won't be able to answer the question, or if you do, it will suffer the risks of misjudgment.
One of the keys to designing the kinds of information that will support your judgment in answering these question is to start with identifying the type of comparison you are trying to make. What do you need to compare with what, in order to answer the question? Another key is to be familiar with the kinds of qualitative and quantitative analyses that can reliably make those comparisons for you. The following sections provide some examples of how these keys can be used to design information to answer the generic types of business questions above. HAVE WE ACHIEVED OUR TARGET?
This is basically a comparison between actual performance and targeted performance. But it's not quite as simple as that. Because business results are constantly affected day in, day out, as time goes by, this comparison can only be really valid if it takes into account the natural variation in results over time. This means that a simple comparison of actual performance for the year (such as the average number of orders per customer per month, rolled up into an annual statistic) compared to the target (of 20 orders per customer per month) is too simplistic. It doesn't take into account the very likely event that improvements may have happened within the last year, so it underestimates actual performance. A better analysis would be a run chart (1) that shows the real changes in the overall average as time goes by, and compares that latest overall average (the mean line in the run chart) with the targeted level.
ARE WE PROGRESSING TOWARD OUR TARGET?
This question requires a comparison quite similar to the question above: actual performance compared to targeted performance. But it's not just the comparison between the mean line and the target level that matters here, it's also a comparison of how the actual overall level (the mean line) is moving as time goes by. Is it moving closer to the target level, fast enough? If you relied just on monthly comparisons to target, you'd be mislead by the natural variation that happens from month to month. You need to see the big pic
Integrity is one thing that stands strong when everything else falls apart. What goes around comes around. So many of us could have been successful today if we had been honest with ourselves. As an internet marketer sometimes I am tempted to over exaggerate in order to make quick sales but I have come to discover that most successful people online succeeded on the ground of integrity. Indolent people cannot survive in commerce scenario of today, it imperative that as a business person, one should be diligent and FOCUSED in achieving maximum success. Say it as it is. Be sincere in your business dealings because it pays in the long run.You see in this life there are forces and principles that control our very lives and believe it or not this principles also apply in business. Have you taken time out to read stories of most successful people in America ,if you haven't please try and read one or two. People remember you for what you did in the past. Endeavor to be prudent and creative in presenting your business to your customers .Integrity brings about creativity and This is the gospel truth .I have personally experienced this myself when your business partners know you as a honest ,sincere, serious minded person your business will astronomically excel.Integrity is tested and tried in hard times of business, which we all face but never for a minute jeopardize the confidence your customers have in you. Always have new ideas and innovation because people get bored when you keep presenting the same thing in same old way. I urge you to research deeply into any product or idea
Secondly, business performance management is about knowing which of your initiatives or projects are working and not working in making those outcomes happen. If you have an initiative around developing a customer relationship management system to improve customer loyalty, then you would expect to see that customer loyalty increases the more the customer relationship management system is implemented and used. If you don't see a change in customer loyalty despite implement customer relationship management, then how can you say the system was working? You can't.
Thirdly, business performance management is about knowing why those things are working or not working so you can choose better things to do, or fix the things you are doing. Perhaps the customer relationship management system isn't impacting customer loyalty because customers are already happy with their relationships with you, but just feel your products or services aren't as relevant as they expected.
This description of business performance management suggests several specific questions are important in managing a business so it's success improves.
Have we achieved our target?
We monitor business performance so we can know when we are actually performing at the level we need to, or want to, perform at. Targets are the description of the "need to" or "want to".
Are we progressing toward our target?
Rather than just waiting to the end of the year, or the date we wanted to achieve the target by, monitoring continuously throughout that timeframe gives us more power to influence the end result.
Are their any unintended consequences of our actions?
Chaos theory, the butterfly effect, and system thinking all tell us that there will always be some kind of flow-on effect from our actions. These flow-on effects can be anywhere from small and insignificant, to shockingly dramatic.
Why are we getting the results we are getting?
This is a question that is seeking information about reasons. Of all the possible reasons that you are getting a particular performance result, which reasons are the main ones, those that have most of the impact? If you are getting a good result, then knowing these reasons helps you confirm what to celebrate and keep doing more of. If you are getting a bad result, then knowing these reasons helps you modify your course of action to turn the result around.
What is likely to happen in the future?
Predictive information is some of the most valuable information in business. While no information can really do the crystal ball thing, a really good understanding of drivers (or lead indicators) can certainly give some great clues about likely future results. Thus, you can prepare for the most likely outcomes, before they happen.
DESIGN YOUR INFORMATION TO ANSWER YOUR BUSINESS QUESTIONS
The types of information needed to answer these business questions are different for each question. And unless that information is designed with the question in mind, it's likely that you won't be able to answer the question, or if you do, it will suffer the risks of misjudgment.
One of the keys to designing the kinds of information that will support your judgment in answering these question is to start with identifying the type of comparison you are trying to make. What do you need to compare with what, in order to answer the question? Another key is to be familiar with the kinds of qualitative and quantitative analyses that can reliably make those comparisons for you. The following sections provide some examples of how these keys can be used to design information to answer the generic types of business questions above. HAVE WE ACHIEVED OUR TARGET?
This is basically a comparison between actual performance and targeted performance. But it's not quite as simple as that. Because business results are constantly affected day in, day out, as time goes by, this comparison can only be really valid if it takes into account the natural variation in results over time. This means that a simple comparison of actual performance for the year (such as the average number of orders per customer per month, rolled up into an annual statistic) compared to the target (of 20 orders per customer per month) is too simplistic. It doesn't take into account the very likely event that improvements may have happened within the last year, so it underestimates actual performance. A better analysis would be a run chart (1) that shows the real changes in the overall average as time goes by, and compares that latest overall average (the mean line in the run chart) with the targeted level.
ARE WE PROGRESSING TOWARD OUR TARGET?
This question requires a comparison quite similar to the question above: actual performance compared to targeted performance. But it's not just the comparison between the mean line and the target level that matters here, it's also a comparison of how the actual overall level (the mean line) is moving as time goes by. Is it moving closer to the target level, fast enough? If you relied just on monthly comparisons to target, you'd be mislead by the natural variation that happens from month to month. You need to see the big pic
Overstock.com, with its very successful television campaign and terrific deals on wholesale merchandise of all kinds seems to be a model for the new online economy. The company has become something of a darling in the online wholesale world but all is not well. However, Overstock.com has been troubled by shipping problems, legal struggles and an ongoing financial crisis. While the company enjoys an excellent reputation over all questions have been piling up.A little over a year ago the Federal Trade Commission launched an investigation after receiving numerous complaints from customers regarding Overstock’s shipping policies. At the time Overstock claimed that the increased complaints were a natural result of the dramatic increase in the number of orders they shipped and was not because of any illicit behavior on their part.On Tuesday, February 28 the Salt Lake City based company announced that it would be revising economic reports pertaining to the company all the way back to 2002. They claim that a long running error regarding freight costs has caused them overstate their economic loses during that period.When all the recalculation is said and done it should increase Overstock’s inventory and reduce its loses by $3.5 million. Overstock says they will re-file their reports with the Securities and Exchange Commission as soon as they can. Investors seemed to regard the revision as bad news and the company’s stock dropped 53 cents a share. This adds on to an overall drop in the stock of 18% for the year. In fact the present value of Overstock’s shares is less than one
Are their any unintended consequences of our actions?
Chaos theory, the butterfly effect, and system thinking all tell us that there will always be some kind of flow-on effect from our actions. These flow-on effects can be anywhere from small and insignificant, to shockingly dramatic.
Why are we getting the results we are getting?
This is a question that is seeking information about reasons. Of all the possible reasons that you are getting a particular performance result, which reasons are the main ones, those that have most of the impact? If you are getting a good result, then knowing these reasons helps you confirm what to celebrate and keep doing more of. If you are getting a bad result, then knowing these reasons helps you modify your course of action to turn the result around.
What is likely to happen in the future?
Predictive information is some of the most valuable information in business. While no information can really do the crystal ball thing, a really good understanding of drivers (or lead indicators) can certainly give some great clues about likely future results. Thus, you can prepare for the most likely outcomes, before they happen.
DESIGN YOUR INFORMATION TO ANSWER YOUR BUSINESS QUESTIONS
The types of information needed to answer these business questions are different for each question. And unless that information is designed with the question in mind, it's likely that you won't be able to answer the question, or if you do, it will suffer the risks of misjudgment.
One of the keys to designing the kinds of information that will support your judgment in answering these question is to start with identifying the type of comparison you are trying to make. What do you need to compare with what, in order to answer the question? Another key is to be familiar with the kinds of qualitative and quantitative analyses that can reliably make those comparisons for you. The following sections provide some examples of how these keys can be used to design information to answer the generic types of business questions above. HAVE WE ACHIEVED OUR TARGET?
This is basically a comparison between actual performance and targeted performance. But it's not quite as simple as that. Because business results are constantly affected day in, day out, as time goes by, this comparison can only be really valid if it takes into account the natural variation in results over time. This means that a simple comparison of actual performance for the year (such as the average number of orders per customer per month, rolled up into an annual statistic) compared to the target (of 20 orders per customer per month) is too simplistic. It doesn't take into account the very likely event that improvements may have happened within the last year, so it underestimates actual performance. A better analysis would be a run chart (1) that shows the real changes in the overall average as time goes by, and compares that latest overall average (the mean line in the run chart) with the targeted level.
ARE WE PROGRESSING TOWARD OUR TARGET?
This question requires a comparison quite similar to the question above: actual performance compared to targeted performance. But it's not just the comparison between the mean line and the target level that matters here, it's also a comparison of how the actual overall level (the mean line) is moving as time goes by. Is it moving closer to the target level, fast enough? If you relied just on monthly comparisons to target, you'd be mislead by the natural variation that happens from month to month. You need to see the big pic
Have you had it up to “here” in your present job? Are you thinking that another job would provide a better fit and mean a true commitment to the job? Well, welcome to the club…and it’s a large one. Employment experts believe that over 50 percent of the working population, at any given time, is ready to move on and find another job that is a better fit.Of course, now might not be the right time to make that move for any number of reasons, not the least of which might be finances, family or fear. But here are 7 things you can do to create a better work situation for yourself in your present job. If you practice these actions, you will have more energy and challenge, create new connections with your environment and be seen as someone who is working to help your organization succeed. And that’s all good—for you and your career!1. Identify - and get to know - your strengths. When you know them, you can be conscious of how to best apply them to your work. When we use our strengths, or our natural talents, we are doing our best work…and that provides satisfaction. In their book, Now, Discover Your Strengths, authors Marcus Buckingham and Donald Clifton identify 34 core strengths or talents that people possess, and we each excel in five or six of them. Discover your top strengths, and you will forever look at the work you do and the contributions you make differently. When you are aware of your strengths you can purposefully use them to create work satisfaction. It’s a matter of doing more of what you do best.2. Use your strengths every day to improve your work an
This is basically a comparison between actual performance and targeted performance. But it's not quite as simple as that. Because business results are constantly affected day in, day out, as time goes by, this comparison can only be really valid if it takes into account the natural variation in results over time. This means that a simple comparison of actual performance for the year (such as the average number of orders per customer per month, rolled up into an annual statistic) compared to the target (of 20 orders per customer per month) is too simplistic. It doesn't take into account the very likely event that improvements may have happened within the last year, so it underestimates actual performance. A better analysis would be a run chart (1) that shows the real changes in the overall average as time goes by, and compares that latest overall average (the mean line in the run chart) with the targeted level.
ARE WE PROGRESSING TOWARD OUR TARGET?
This question requires a comparison quite similar to the question above: actual performance compared to targeted performance. But it's not just the comparison between the mean line and the target level that matters here, it's also a comparison of how the actual overall level (the mean line) is moving as time goes by. Is it moving closer to the target level, fast enough? If you relied just on monthly comparisons to target, you'd be mislead by the natural variation that happens from month to month. You need to see the big picture pattern or trend over time.
ARE THEIR ANY UNINTENDED CONSEQUENCES OF OUR ACTIONS?
A slightly more complex comparison is needed to answer this question. Answering this kind of business question means you need to have some idea of what kinds of unintended consequences you could have expected, and some information about the extent to which these consequences are occurring - before and after you take action to achieve the performance result you want.
When you have this information, it would ideally take a similar form to the information that answers the previous two questions: a run chart that shows real changes in the overall actual level as time goes by. You then can compare the patterns or trends over time of your performance result, with those of the unintended consequences, and if you see some kind of correlated pattern, there's a strong clue that by achieving your performance result, you are also getting some other kind of result as a consequence. This may be a good thing, but it also may be a bad thing. And by knowing, you can take action if it's needed.
WHY ARE WE GETTING THE RESULTS WE ARE GETTING?
The comparison type here is be able to see the relative size of impact of each of a range of possible reasons for the result you are getting. So step one is to have a good idea of what those reasons could be. The second step is to be able to source some data that lets you know how often, or to what extent, each reason has actually played out during the timeframe you monitored your performance result. A really useful analysis of such data is a Pareto chart. This shows the relative size of impact of each reason, from largest to smallest. It will highlight the 20% of reasons that are having 80% of the impact on your result. And viola, you have a place to start investigating further, to find how you can turn your result around.
WHAT IS LIKELY TO HAPPEN IN THE FUTURE?
The kind of comparison needed to answer questions like this is the comparison between or among a set of measures or factors or variables that you hypothesize have significant influence over the direction your performance result will head. These measures or factors or variables are your drivers, or lead indicators. You test these hypotheses through a scatter plot (entirely visual), correlation analysis (very visual, with a quantitative measure of strength of the relationship) or regression analysis (not visual, but with a quantitative model of the relationship) to determine the strongest of these lead indicators.
Then, using the run chart analysis described under previous questions, you can interpret the emerging trends in your lead indicators and estimate or calculate the impact this will have on your performance result.
DELIBERATELY DO TWO THINGS
Designing excellent information to inform decisions about business performance is not rocket science. But it usually does require some effort be applied to clearly articulating each business question that needs to be answered in order to understand and make the decisions, and applied to deliberately designing the kind of information that can adequately (even if not completely) answer those questions.
REFERENCES
(1) Understanding Variation: The Key to Managing Chaos, Donald Wheeler, SPC Press, Inc., 1993
(2) The Visual Design of Quantitative Information, Edward Tufte, Graphics Press, 1983-1999
(3) Envisioning Information, Edward Tufte, Graphics Press, 1990
(4) Visual Explanations, Edward Tufte, Graphics Press, 1997
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