Applying Statistics to Problem Solving

Applying Statistical Thinking As Part of Your business Strategy

The statistical thinking approach to practice improvement has three key elements: process, variation, and data. All work within your practice is a process, and business processes provide the context and focus for business improvement.

To improve results overtime, we must improve the processes that produce the results. All work occurs in a system of processes, and an organization touches its customers through the processes it operates. Therefore, to improve results, such as profitability or customer satisfaction, analysis should focus on the processes that generate value for customers. Improving the effectiveness of these processes to better satisfy customers typically produces more revenue (top-line growth), and improving the efficiency of these processes produces cost savings (bottom-line improvements).

The overall statistical thinking approach requires merging data-based methods with subject matter knowledge in an iterative fashion. We gather data to verify or refute existing hypotheses and, based on the data analysis, we typically modify those hypotheses. This leads to further questions that need to be verified or refuted, continuing the iterative cycle of hypothesis suggesting data, data modifying hypothesis. Recall that data have no meaning in themselves; they take on meaning only in the context of some conceptual model of the process being studied.

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