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BASIC BUSINESS CENTS: Data provides a guide for business actions

"Experience is not the best teacher; it is not even a good teacher. It is too slow, too imprecise and too ambiguous," said Russell Ackoff, who was an independent consultant and former professor at the Wharton School for Business.

Intuition and experience are no substitute for data when solving business problems.

Some years ago, I witnessed a complete change in relationship between two divisions of the same company. One was a supplier to the other and for years when a problem arose, they started pointing fingers at each other and the animosity festered. One day an individual brought data in chart form to a joint meeting about a current problem. All of a sudden the attendees started to focus on the problem instead of each other and they were able to work together to find a solution.

Data is a guide for our actions. From the data, we learn pertinent facts and can take correct action.

We need first to identify the purpose of gathering data and test to ensure the comparisons we are making are relevant to our problem.

We should start by gathering data to show that we have correctly identified the problem and it is, in fact, a problem.

We could test by collecting data at different locations, different times, or different symptoms of the problem. When a solution is identified, we could gather data to show that our solution does indeed solve the problem.

Generally, data can be divided into five types:

n Measurement data, length, weight, time, etc;

n Countable data, number of defects, percentage of defects, etc.;

n Data on relative merit;

n Data on sequences and

n Data on grade points.

Steps must be taken to ensure the data are reliable. The method needs to be clearly defined so that all understand and are consistent. When collecting data, it is important to arrange it neatly to facilitate later processing.

The origin must be clear or it is of no value, time must be noted, which individuals or equipment was involved, and the data should be collected in time sequence when possible.

A check sheet is a paper form on which the items to be checked have been printed so that data can be collected easily and concisely. Its main purposes are to make data gathering easy and to arrange automatically so that they can be used easily later on.

Just because the kind of data needed has been determined, it does not necessarily follow that it can be collected.

Lack of equipment, lack of understanding the purpose or value by individuals involved, lack of knowledge of how to collect the data, and impossible requests are often problems.

Training, resourcefulness, and the will to find a way are key to collect the proper data to solve the problems.

Normally when the relevant data is collected and presented in proper charts, the solution miraculously becomes apparent.

Charting of the data will be discussed in future columns.

Louis Schultz, managing director of Process Management LLC, has assisted organizations worldwide with performance improvement. He currently assists area business owners as a SCORE counselor. E-mail him with questions or comments at lou@processman