Use and Misuse of Stats
harvard
A Newsletter from Harvard Business School Publishing
management update
ARTICLE REPRINT NO. U0603C
The Use and Misuse of Statistics
For a complete list of Harvard Business
School Publishing newsletters: http://newsletters.harvardbusinessonline.org For reprint and subscription information for Harvard Management Update:
Call 800-988-0866 or 617-783-7500 http://hmu.harvardbusinessonline.org For customized and quantity orders of reprints:
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For permission to copy or republish:
Call 617-783-7587
The Use and Misuse of Statistics
How good are those numbers you’re looking at, anyway?
Don’t rely on statistical analysis unless you know the pitfalls.
A
Is customer satisfaction rising? You inspect the numbers, but you’re not sure whether to believe them. It isn’t that you fear fraud or manipulation, it’s that you don’t know how much faith to put in statistics.
You’re right to be cautious. “The actual statistical calculations represent only 5% of the manager’s work,” says
Frances Frei, an assistant professor at Harvard Business
School who teaches two-day statistics seminars to corporate managers. “The other 95% should be spent determining the right calculations and interpreting the results.”
Here are some guidelines for using statistics effectively, derived from Frei’s seminar and other sources. Although the perspectives offered here won’t qualify you to be a high-powered statistical analyst, they will help you decide what to ask of the analysts whose numbers you rely on.
RE DEFECT RATES DECLINING?
1. Know what you know—and what you’re only asserting “In real life, managers don’t do as much number crunching as they think,” says Victor McGee, professor emeritus at
Dartmouth College’s Amos Tuck School of Business. “In fact, managers are primarily idea crunchers: they spend most of their time trying to persuade people with their assertions.” But they rarely realize the extent to
A Newsletter from Harvard Business School Publishing
management update
ARTICLE REPRINT NO. U0603C
The Use and Misuse of Statistics
For a complete list of Harvard Business
School Publishing newsletters: http://newsletters.harvardbusinessonline.org For reprint and subscription information for Harvard Management Update:
Call 800-988-0866 or 617-783-7500 http://hmu.harvardbusinessonline.org For customized and quantity orders of reprints:
Call 617-783-7626 Fax 617-783-7658
For permission to copy or republish:
Call 617-783-7587
The Use and Misuse of Statistics
How good are those numbers you’re looking at, anyway?
Don’t rely on statistical analysis unless you know the pitfalls.
A
Is customer satisfaction rising? You inspect the numbers, but you’re not sure whether to believe them. It isn’t that you fear fraud or manipulation, it’s that you don’t know how much faith to put in statistics.
You’re right to be cautious. “The actual statistical calculations represent only 5% of the manager’s work,” says
Frances Frei, an assistant professor at Harvard Business
School who teaches two-day statistics seminars to corporate managers. “The other 95% should be spent determining the right calculations and interpreting the results.”
Here are some guidelines for using statistics effectively, derived from Frei’s seminar and other sources. Although the perspectives offered here won’t qualify you to be a high-powered statistical analyst, they will help you decide what to ask of the analysts whose numbers you rely on.
RE DEFECT RATES DECLINING?
1. Know what you know—and what you’re only asserting “In real life, managers don’t do as much number crunching as they think,” says Victor McGee, professor emeritus at
Dartmouth College’s Amos Tuck School of Business. “In fact, managers are primarily idea crunchers: they spend most of their time trying to persuade people with their assertions.” But they rarely realize the extent to