Defense against “Give me a Number”
by Sam Savage
A common fork in the road to hell is arrived at when, in the face of uncertainty, the boss demands: “Give me a number.” You may be tempted to respond with, “Would you settle for an average?” But even the correct average of the uncertain duration of a task, demand for a new product, or labor hour requirements for a job, leads to a host of systematic errors that guarantee that your plans will be wrong on average. I dubbed this problem “The Flaw of Averages” in an article in the San Jose Mercury News in 2000, and have been struggling to correct it ever since with growing success.
Technically you should say to the boss, “Here’s the probability distribution of the number you want.” But I don’t recommend that if you want to keep your job. Instead, the latest version of the SIPmath™ Modeler Tools, both the free version and guilt-free $500 Enterprise version, now include the new “Chance of Whatever” button.
Just put your cursor in the cell where you want the chance of whatever to appear, then specify the uncertain cell that needs to be greater or less than your boss’s specified goal. Then click OK. Now as you change your goal, the chance cell will immediately update. So, next time the boss demands a number, you can respond with, “What do you want it to be? I can tell you the chance of meeting your goal.”
Brian Putt, Chair of Energy Practice at ProbabilityManagement.org, has a new video on how to use this feature of our tools. Check it out.