Variation - they mysteries of ...

If you are remotely interested in good management then fire up Excel and try the simulation below.  It took me about 5 minutes and I was astounded by the results .  Several manual recalcs later and I was even more suprised.

Here is a statistical intuition test from product development guru Donald Reinertsen, which he said is based on an example from "Introduction to Probability Theory and its Applications" by William Feller.

Suppose you flip a coin 1000 times. Keep a cumulative sum, starting with zero and then every time it comes up heads you get add 1, every time it comes up tails you subtract 1.

Question 1: How many times will the cumulative sum equal zero?
Question 2: How many flips will there be, on average, between the times the sum equals zero?

You can simulate this quite easily using a spreadsheet like Excel.

[Via my TOC friend, Steve Holt]

Comments

[Paul Wilson]

Ok Clarke, I don't get it. What's the connection with good management?

[Philip Oakley]

Didn't you know all coins are biased.... You toss it once and it immediately has a bias because it is now always one up for that side of the coin ;-)

It also shows why most personnel assessments don't really work because they think they need a corrective action for a random event.

P.