Lies, damned lies and statistics

Lies, damned lies and statistics, the phrase attributed to Benjamin Disraeli (though not found in his work), could be applied to the Office of National Statistics reporting for UK GDP. I'm not suggesting that there had been any underhand dealings going on but rather a desire to be over cautious that the press capitalised on

You may remember that the ONS reported UK GDP to have fallen by 0.4% in the third quarter of 2009. This caused a public (press?) outcry against the government - why weren't they doing more? At the time I remember reading minor reports that the figures were likely to be revised up towards the end of the year for very valid reasons. But, being British, the bad news was over played.

So now that it is the end of the year, it seems that the true figure for the third quarter looks more likely to have been a fall of 0.1% and may even have been neutral. See "Office for National Statistics data suggests recession already over."

What has this got to do with running a small business? Two things - first, business morale took a further battering which we really didn't need and second there is a lesson about how to turn information into knowledge. The ONS knew the factors affecting the calculations accuracy and alerted us to the possible update, but the press decided to largely ignore this.

With any management information, if one relies on the headline figure and doesn't bother to understand the surrounding information, a bad decision can be taken. Every manager needs a set of key performance indicators (information) but they must be applied with understanding (knowledge).