Why numbers move.
WHAT VARIATION IS
Natural fluctuation in any measure.
WHY IT MATTERS
Most movement is variation, not change.
WHAT HAPPENS WHEN THAT IS MISUNDERSTOOD
Reacting to noise Congratulating or blaming people for randomness Changing things that were working
WHAT TO ESTABLISH
What normal variation looks like for each figure you track.
HOW
Look at twelve or more periods and note the typical range.
WHAT THAT GIVES YOU
A threshold. Movement within it is noise; beyond it warrants attention.
WHAT TO PLOT
The figure over time, with the typical range visible.
WHAT TO INVESTIGATE
Values outside the usual range Several consecutive periods moving the same way
THAT SECOND SIGNAL
More meaningful than a single large movement.
WHAT NOT TO DO
Explain every fluctuation Demand a reason for normal variation
WHAT TO TELL PEOPLE
That variation is expected, and only sustained change matters.
