How many hours do you

How many hours do you weigh?

Measurement is meaningless unless you're using the correct units of measure. We think of time in seconds, hours, days, months, and years. We weigh things in ounces, pounds, tons, grams, and so on. And we have to match the appropriate scale, seconds or year?, to convey meaningful information. If you ask my age and weight, it's not very useful for me to tell you I'm about 25 billion seconds old and weigh .087 tons. Yet business people do this every day.

Yesterday at the monthly meeting of eLearning Forum, someone said "When companies aren't making any money, they don't spend any money." We've all seen it happen. The issue is why. Business is cyclical. We're in a recession. Good times will return. Can you imagine a better time to recruit great staff? The price is right. Very talented people are looking for jobs. It's a buyers market. Think back to the sellers market eighteen months ago, when signing bonuses for IT people reached ridiculous levels and researchers were saying that lack of IT staff was holding back progress. Are businesses' memories so short that they don't remember paying six-figure salaries to 25-year olds who possessed a needed skill?

Let's look at this. Assume a business cycle, from highpoint to trough and back to high, is about three years long (the red line below). Medium-term plans should be pegged to the cycle, for averaging out the high and the low is the best overall representation of the operation of the business. But that's not how it works. Instead, business thinks in terms of the earth revolving around the sun (the blue lines below). The fact that we call these years makes this no less arbitrary.

The tic-marks of years aren't a problem unless we try to use them as blinders and look at only one interval at a time. For instance, this year is looking something like this:

Decision-makers who use the wrong units of measure, e.g. years instead of cycles, always by when prices are higher.

Posted by Jay Cross at October 16, 2001 08:05 AM | TrackBack

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