In Module 1, we discussed the story of data and why we might want to use a histogram to tell a story and solve problems. In this module, we’ll discuss some of the skills you will need to make sound business decisions using histograms.

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1. Thinking Critically and Attention to Detail

2. Understanding the Situation

3. Interpreting the Data

You probably noticed that the skills listed on the last slide are not just related to histograms. No matter what type of data representation you have, these steps will help you make an informed decision.

In business, just because you make an informed decision doesn’t mean that it will solve your problem. Your solution might actually lead from one problem to a series of others, That’s the nature of business and what makes it so much fun!

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The skill of critical thinking is essential to any problem solving situation in business. It means not just thinking deeply about a problem but also identifying possible causes and multiple solutions. As with many problems in life, problems you encounter in business will have a many possible solutions.

CRITICAL THINKING

Critical thinking is not something you just get taught; it must be practiced. So we’re going to give you a scenario that will help you hone your critical thinking skills.

EXAMPLE SCENARIO: As a marketer, you are in charge of watching website statistics. Over the course of several months, you notice a slow decline in the overall number of visitors to your website. This is worrisome to you since your website is the main source of business for your company. What do you do?

CRITICAL THINKING

Most people taking this course probably aren’t marketers, but placing yourself in someone else’s shoes is definitely a critical thinking skill, especially for managers and executives.

You might have wondered, ‘why the slow decline and not a sharp decline?’ Maybe, ‘are your competitors doing anything that is stealing away market share?’ Or, ‘was there something causing the statistics to be high to begin with and they are now just averaging out?’

All of these and more are appropriate ways to approach the problem by thinking about it critically.

CRITICAL THINKING

Being able to notice things that might be out of the ordinary is also essential to solving business problems and is an extension of critical thinking. Often it is the small things that cause big problems down the line. Any wonder why this Wendy’s franchise sales might have dipped?

ATTENTION TO DETAIL

By nature, small problems are usually not as obvious as the picture to the right. Again, let’s walk through a scenario that will help hone your attention to detail.

EXAMPLE SCENARIO: As the Director of Human Resources, you are doing salary comparisons to make sure that your company is matching industry salary averages. You have the hiring manager make a histogram for salary frequency for your company while you print off histograms of salary frequencies for companies similar to your size.

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EXAMPLE SCENARIO: At first glance, it appears that your company is right in line with other companies. But something isn’t quite adding up…

Can you see what is wrong?

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EXAMPLE SCENARIO: Do you see it? The histogram for your company is missing a bin! The bin for $20,000-30,000 is combined with the $30,000-40,000 bin, making a $20,000-40,000 bin. While technically the histogram isn’t lying, it’s not appropriately representing the data since all bins should be equal intervals.

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EXAMPLE SCENARIO: Turns out the hiring manager was hiring less qualified people that he could pay lower salaries as a cost savings tactic. He modified the histogram he gave you to try to hide his tactic, hoping that you would only look at the general shape of the curve and not focus on the bins intervals, but after taking this course, you knew better than that!

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CRITICAL THINKING: What do you think are some of the common mistakes that are made with histograms that you should constantly be on the lookout for?

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