The term statistical significance is critical to most every discussion about spending other peoples money with some new and innovative process.
When we here I know a CEO that uses my approach, we need to ask several critical questions both getting too excited about this idea that is being suggested. Especially is this new idea violates some core business processes, like Microeconomics, let alone FASB 86, GAAP cost and revenue recognition.
- Is that CEO the CEO of a publically traded firm, subject to governance processes? If so, some outside the developer communbity gets to say if the new and innovative idea hasn't violated the business rules.
- Does that CEO's company live a domain where what they do is like what other people do? You know a Reference Class that can be used outside the ancedote.
- Does that CEO have to report cash obliogations to his line or credit or banker for some planning horizon in the future? Those pesky bankers do like know the cash call demands from your firm for that LOC.
The notion of an anecdote is always interesting in conversation I knew a guy once who .... But can we make policy decisions based on anecdotes? Hopefully not.
We can make policy decisions based on statistically sound observation - 8 out 10 dentist recommend Pepsident Toothpaste was a popular advertisement in the 1970's.
This leads us back to How To Lie With Statistics and the self-selected sample space.
- Let me ask all the people I ride with in our cycling club what they think of the local brewery where we leave from on Tuesday evenings, what they think of the Nitro Milk Stout that is served for free. We like it.
Without a statistical sound sample space, a statistically sounds sampling processes, any conclusion are just ancedote. This is the core issue with things like the Standish report and other surveys suggesting the sky is falling on IT projects.
The same goes for thosie suggesting their favorite apporoach to spending other peoples can be done in the absence of knowing hwo much money, when that money will produce value, and what kinds of value will be produced.
Ask for data. No data, then as they say "Data Talks, BS walks"
† The carton above is from Hugh MacLoed, gapingvoid art, 1521 Alton Road, Suite #518, Miami Beach, FL 33139. I've been following him since day one. You shold do the same and buy his book
