The Science Behind Guestimation - Aditya Yadav

1. “Running an Agile Fortune 500 Company”
Aditya Yadav, aditya.yadav@gmail.com
in.linkedin.com/in/adityayadav76
*

2. *
*A Typical Global Company
*Fortune 500/1000
*200 Divisions
*40 Countries
*25000 Employees

3. @ Acme Inc.
*

4. *
*Original Question “We need accurate Strategies
and hence should we not have the most
accurate data and calculations?”
*The Correct Question - “One of the things
about Complex Systems is that third and fourth
decimal place calculations don’t help than just
costing a lot of time and effort without any
benefit. (Diminishing Returns). Lets see how
we need to work in a Complex
System/Environment. Shall we?”

5. And The Philosophy Behind The Answer
*

6. *
*India has 1.26Billion people
*How many years will it take to have ONE INDIA
ONE LARGE FAMILY?

7. *
*Assume India has 630m Couples.
*Assume Everyone gets married at 25 years of age and
has exactly 2 Children
*Assume No One Marries Within the Family, or more
than once.
*Round 1: 2 siblings get married and hence 3 families
merge into one. And the number of such families is
630m/(2+1)
*Round n: 2^n+1 families merge and 630m/(2^n+1) such
families exist
*Answer: # years = 25yrs * Log[Base2]( (630m)^0.5-1) =
366 yrs

8. *
* Top Consulting Companies love Guestimating!!!
* While most Managers in most companies get paralyzed without enough data or their futile obsession with precision
and accuracy.
* A Guestimate is way better than a blind shot in the dark. 366 years as our Answer is a good number to start with.
* If you are dealing with 5 issues, it is better to have guestimates for all of them rather than not doing anything at all
or taking random shots in the dark or endless arguments where no one has any clue. Or commissioning a 3 years
fact finding mission to mars to get the estimates.
* We were all taught in School “All Indians are my brothers and sisters” Well here we have it. This is the maths
behind that statement. Assuming we start now, we will all be one Large Family in about 366 years.
* Empirical Observation: Most High Level Strategies wont’ change unless there is an order of magnitude difference in
calculations.
* Ask yourself
* Do we need to differentiate between 365.1386 and 365.1299 years?
* Does our Vision/Strategy change if the answer was 200 or 600 years?
* But if the answer was an order of magnitude higher or lower i.e. 3660 years or 37 years then probably our High
Level Strategy would be different.
* Again if we have guestimates for (i) average income, (ii) average agri-production, (iii) average consumption per
capita. I think we would be reasonably be able to Strategize about Self Sufficiency as a Nation and High Level
Strategies to Increase Self Sufficiency
* Some people would actually ask for a 4 year Statistical Survey at a cost of $100m to be conducted before doing
anything.
* A Strategist would gather facts and data, create guestimates and create a Proposed High Level Complex System
Strategy by the end of the week.

9. *
Aditya!!!