It is easy enough for managers to see that things in the business world vary. Some marketing campaigns produce great results; similar ones do not. There are times when the supply chain works effortlessly, and other times when every step is snarled. Some days the numbers look fine, and other days they just don’t add up. Variation is a manager’s natural enemy, making it more difficult to sort out what’s really going on, make valid predictions, and be in control.
Do You Understand the Variance In Your Data?
It is easy enough for managers to see that things in the business world vary. Some marketing campaigns produce great results; similar ones do not. Some days the numbers look fine, and other days they just don’t add up. Variation is a manager’s natural enemy, making it more difficult to sort out what’s really going on, make valid predictions, and be in control. But few managers are equipped to deal properly with variation.
To fully understand what your data is telling you, you must sort out variation and what is causing it. You must acknowledge that variation is important and take it into account. As you dive into the numbers, aim to understand the sources of variation. Then, consider these sources as you gain a feel for measurements of variation, including standard deviation and R-squared. Understanding variation is not that difficult, and it puts a powerful tool in your data science quiver.