What growth and decline may hide...
... Introducing the notions of "Intra" & "Extra"
Disparities between points of view
Disparities between viewpoints are often much more important than suspected. A Key Performance Indicator (KPI) may be growing for a given aggregated group or segment, yet the majority of components that underlie that aggregate be decreasing. But we usually assume, when a cluster grows, that the vast majority of its components also grows. We can safely say that in general, even if a KPI is growing, as much as 30% of its components could be declining or even peaks of 70% or more in some cases.
Paradoxical discrepencies between global and local
These peaks appear at first paradoxical. They are classically explained by the behavior of a few “heavy weights" that make the trend. But often it is not the mix but its variations that explain behavioral differences. Thus, all products without exception in a store may be on sale, yet the overall average price of goods sold increase: customers may have taken advantage of the store sale to buy more upscale and expensive items than usual, so that the average price went up, even with a drop in individual products prices.
Intra and Extra shares as complexity metrics
Thereafter, we coin “Intra share” and “Extra share” as measures of complexity, between homogeneous constraints and heterogeneous degrees of freedom. The Intra is the share of the global and the local that behave identically or similarly, and the Extra is the share of the global and the local that behave differently, even as opposites (e.g. growth on one side and decrease on the other). The Extra share may vary significantly from one month or quarter to another, and its variations often announce a reversal of trend in the associated KPIs.
|Copyright 1989-2014 EFFIS|