1) Jim runs a tractor company and tractor sales are down 3.6% overall this year. However, looking at the sales numbers of his two salespeople, Joe and Larry, tells a more nuanced story. 2) While Larry's numbers are up 2.9%, using control charts to analyze the sales data over time reveals that Larry had a significant drop in sales last month. 3) Joe's numbers are down 8.3% overall but looking at his sales history shows his numbers have not significantly changed, indicating normal variation rather than a problem. 4) Analyzing the full sales data and patterns over time provides more insight than just looking at the yearly percentage changes, to avoid making incorrect

1. A Tale of Two Districts or, how percent changes can fool you @CrunchItForMe

2. Meet Jim

3. (Jim says Hi)

4. Jim runs a company selling…tractors.

5. Tractor Sales are down 3.6% this year -3.6%

6. Jim wants answers…

7. Meet Jim’s two sales guys, Joe and Larry Joe Larry

8. Larry’s numbers are up 2.9%… Larry +2.9%

9. Joe’s numbers are…not. Joe -8.3%

10. What should Jim do?

11. (I know, I’m worried about Joe, too…)

12. but what if it was all just a big misunderstanding?

13. Instead of just looking at % change “Year Over Year”… -3.6%

14. … what if we plotted units sold by month?

15. and what if we applied some brand new techniques? http://amzn.to/dOWKBw Walter Shewhart written in 1939

16. to understand the variation in the data: x-bar (or average) UCL – Upper Control Limit LCL – Lower Control Limit “Common Cause” variation “Special Cause” variation “Special Cause” variation

17. So wait, only LAST month is a “down” month…

18. … and WHO do you think caused THAT? Joe Larry

19. Probably Joe, right? Joe -8.3%

20. But if we look at Joe’s numbers over time… -8.3% 2009: 96 Units

21. But if we look at Joe’s numbers over time… -8.3% 2010: 88 Units

22. Joe We see no statistically significant change! “Common Cause” variation

23. But Larry can’t be the reason, his numbers are up, right? Larry +2.9%

24. Let’s look at Larry’s numbers over time… 2009: 69 Units

25. Let’s look at Larry’s numbers over time… 2010: 71 Units

26. Looks like Larry has some explaining to do about December… Larry “Special Cause” variation

27. These two approaches tell two very different stories… Percent Change “YOY” Control Charts

28. Blaming Joe would be mistaking NOISE for a SIGNAL

29. Rewarding Larry would be missing the opportunity to identify a SIGNAL

30. Either way, Jim’s business loses an opportunity to LEARN and GROW…

31. … and the fate of our sales guys’ careers hangs in the balance… Joe Larry

33. Got all that, Jim?