How to Keep and Use Statistics

(I learned this skill in a business course in the late 1970s. I would love to take credit for it but I didn’t invent it, though I have modified it for our use and in some cases, I believe I have improved on it!)

Each department and employee here produces something vital for the success of the organization. Statistics (numbers) measure the production of each department and sometimes the production of each employee in that department. Often times an employee in a department will have more than one statistic that measures his or her production in different areas.

For example, the salespeople keep these stats (stat is short for statistic): total sales, profit, customer contacts (emails, calls, letters, etc.), number of positive Yelps and more. The number of anything you produce can be measured in comparison to an earlier number of that thing. This comparison is called statistics.

We graph these statistics (numbers) and watch them every week to monitor the health of the company.

We are always looking to improve these statistics.

Having statistics is a vital part of managing our organization and ensuring its success. We compare our production for the past week with our production of the previous week(s) and sometimes to the production of previous quarters, or years, to see if it is increasing or decreasing. Are we buying and selling more or buying and selling less? Are we making more or less profit? Are we paying more or fewer bills? Generally, if the answer is, “Less,” then management must formulate immediate plans to remedy the problem and get that department’s production increasing.

With an understanding of how to compile (put together), graph (on paper), and compare statistics, we can determine exactly what state of existence an activity is in. We call these states of existence, “conditions.” We are always trying to improve the condition of any statistic.

THE 5 CONDITIONS

There are five “conditions” that we use to manage our statistics and each has a “formula” that will help to improve that condition. You determine what condition formula to use by looking at the slant of the line connecting last week’s number to this week’s number.

These are the five slants from worst Non-Existence to best Affluence:

• Non-Existence – Steep near vertical down and near the bottom of the graph.
• Danger – Going down.
• Emergency – Slightly down or flat.
• Normal – Slightly up.
• Affluence – Steeply up.

The names might seem odd at first but you will get used to them as we go along.

Let’s use a salesperson’s graph for the example. If last week they sold $15,000 and this week $16,500, and we put these numbers on a graph, the slant between the two numbers would be slightly up. An increase is called “Normal.”

Here is how a series of weeks might look on graph changing from week to week.

WHY WE USE THIS TOOL

Leo Hamel Fine Jewelers has been using these Formulas for decades and I know from personal experience that using these Formulas WORK to improve situations and statistics. I have used them to improve ANY part of my life from losing weight to increasing my personal income. You can graph ANYTHING and apply these Formulas to it. It is almost miraculous that if you graph the statistic of something, it will improve just by watching it. This is likely simply because you become more aware of it. If you both graph it AND apply some work to it, such as these Formulas, you will improve conditions and improve the statistic.

Note: Most graphs show improvement by having the number increase by going up such as income or money made as in the above graphs. But in graphing something like weight loss though the “up” would be a smaller number as you are trying to get a decrease in something (weight) so up would be a number decreasing. This is simply called a “reverse graph.” See graph below. It has high numbers at the bottom, lower numbers at the top.

You don’t have to believe in these formulas for them to work. Use it and you will become a believer. Again, we only use this tool because we used it, FOR DECADES, and it worked.

So according to this theory, a person will always be in one of these Conditions with regard to any area of life, from a low Condition of Non-Existence to a high Condition of Affluence. So a person could be in a Condition of Affluence at his job, a Condition of Emergency in his marriage, a Condition of Non-Existence in his finances, and a Condition of Normal Operation with his health. “Conditions formulas” are the precise steps written out for each Condition that we can apply to immediately improve any personal or professional situation in which we find ourselves, and help us to progress to the next higher Condition.

These Formulas flow one to the next and will take you from a low Condition to the next higher. Or from a good Condition to the next higher, like from Normal to Affluence, which is better.

If a person new to a job intelligently applies the Non-Existence formula, the person can expect to get into a Danger Condition—the next one higher than Non-Existence on the scale. If he then applies the Danger Formula, he can expect to find himself in Emergency Condition and must follow the Emergency Formula with his job and he will move up to the next one.

He can now expect to be in Normal Operation and if he follows that Formula, he will come up to Affluence.

It is a long way from Non-Existence to Affluence and this applies to groups, to companies, to countries as well as individuals. It also applies whenever a person fails at his current job. He has to start again at Non-Existence and build back up the same way, Condition by Condition.

The Conditions, and their Formulas, from Lowest to Highest

When applying these formulas to your job, we read the formula and write up the steps as we do them. This is called a “write up.” Once you decide which formula to apply (by looking at your graph) you write the condition name at the top of a piece of paper and then write the steps you will do based on the formula. You may also use a computer with formulas pre-written and fill in the answers.

The Condition of Non-Existence

There are two formulas for Non-Existence: one for a person new on a job and one for someone who has been on the job a while but is not doing well.

If you are new to a job you won’t have any numbers to graph so you would do the “New Job” formula.

New Job Non-Existence Formula

Every person starting a new job begins in a condition of Non-Existence, whether you got the job by being newly hired, promoted, or demoted. In any of these most likely you do not exist to other people yet, as they are not aware that you are now holding that job, and you don’t yet know how to do the job successfully. To be successful in your new job, you need to get in touch with the other people you’ll be working with, let them know that you are now holding that job, find out what it is that they need from you, and then make sure that they get it.

Sometimes when taking on a new job, you are tempted to make big changes, either to appear to be instantly “good” at the job, or because you think that you can already see better ways to do things. It’s actually not a good idea to make any changes to a new job until you have learned the job the way it’s being done now. You may not yet understand everything that is needed and wanted from a person who is holding that job, and inadvertently make changes that are detrimental instead of helpful. The Non-Existence Formula is designed to guide you in becoming familiar with your new job and the needs of the people with whom or for whom you now work.

Non-Existence Formula (for a new job)

1. Find a communication line (when you introduce yourself to someone you have found a communication line).
2. Make yourself known.
3. Discover what is needed or wanted.
4. Do, produce, and/or present it.
   • Find a communication line – Communication is the exchange of information. For this step, the first line of communication that you need to make should be with your supervisor. The next step is to find out which of your coworkers has to give you information to do your job or depends on you to give them information in order to do their jobs. Find all the communication lines that are appropriate for your job.
   • Make yourself known – Introduce yourself to those with whom you’ll be working. Sometimes HR will take you around and make the introductions, but if not, you’ll have to do it on your own. Tell them who you are and what job you are doing.
   • Discover what is needed or wanted – Really pay attention and make notes as your supervisor tells you what he or she wants you to do in your new job. A good training program will provide that information for you that you need to succeed in your job. If it doesn’t, you may have to be proactive and continue to ask questions of your supervisor until you fully understand what it is that he or she wants you to do.
     Sometimes you’ll find that what coworkers tell you is needed or wanted needs further investigation. Check with your supervisor if it doesn’t sound right. Never take orders from coworkers or anyone except your supervisor. If someone appears to be telling you that it’s your job to do something that you weren’t told by your supervisor to do, ask your supervisor about it.
   • Do, produce, or present it – means just what it says. It does no good to know what you’re supposed to do if you don’t then do it! Do your tasks consistently in a timely and efficient manner. If you find that you need more training in order to do your job well, proactively get with your supervisor to find out how that training can be arranged. If your job is to produce something, like widgets, then make tons of widgets! If your job is to present something, like to look good and greet people warmly at the door, then look great and be warm!

The basic idea on this step is that you cannot do what is needed from you if you don’t know who to deal with and what to do. So you need to find out what it is you need to do, find all the people you need to know in order to do your job, and then DO IT!

Non-Existence Formula Expanded (for failure on a job or a steeply down statistic)

If you are already on the job and you have a weekly graph that looks like the one just below, you are in “Non – Existence.”

Steep near-vertical down, ending near or at the bottom of the graph.

Sometimes you’ll find your stats in a Condition of Non-Existence long after you’ve learned how to do your job. When that happens, there are additional steps that can be taken to get out of Non-Existence. This is called the “Expanded Non Existence Formula.

To do any job well, you have to proactively get information and give information. Where this is not done, you’ll find yourself doing projects that get rejected or have to be redone, having restraints put on your actions, and find yourself not improving the condition you are in. You’ll get in trouble with your supervisor because you don’t get and give the vital information that is needed of you and your supervisor ends up having to do your job.

It is the duty of any employee to round up the communication lines that relate to your job, find out who needs vital information from you, and provide it as a continuing action. If you don’t bother to find out what is really needed or wanted and simply assume it or think you know when you don’t, you will soon become unsuccessful in your job, and really go into Non-Existence when you get fired.

The basic idea here is that if you have been on the job and are failing you must have either not known who to deal with or not known what to do. (There is also the possibility that you knew these two things but just didn’t produce, in which case you really should be fired, right?) Handling these two errors is as easy as following these steps as follows:

The Expanded Non-Existence Formula is:

1. Get yourself on every communication line you will need in order to give and obtain information relating to your duties.
2. Make your job title and duties known to every person you will need for the obtaining of information and the giving of data.
3. Discover (ask) from your supervisor, fellow employees, and any customers that your duties may require you to contact, what is needed and wanted from you.
4. Do, produce, and/or present what each needs and wants in a way that conforms to company policy.
5. Maintain the communication lines that you have and expand them to obtain other information that you now find you need on a routine basis.
6. Maintain your communication lines to inform others of what you are doing, but only those who actually need the information.
7. With full information being given and received concerning your duties, routinely do, produce, and/or present a greatly improved result on your job.

After writing up, and doing, Non-Existence you would write up and do Danger.

The Condition of Danger

A Danger Condition is normally assigned in one of three situations:

• An Emergency Condition has continued too long.
• A statistic plunges downward very steeply.
• A supervisor suddenly finds himself or herself doing or directing the job because the department is in trouble.

Number One would be a case of a graph that is flat week after week or flat and slightly down week after week. Number Two is seen in the graph above and number Three is when someone is doing his or her job so poorly that their supervisor has to step in and do the work for them or fix a problem.

Let’s look at number 3 first where a supervisor is doing the work of their subordinate. To “bypass” someone means to jump the proper person in a chain of command. If you normally supervise Tom, and Tom makes a customer angry, you would find yourself calming the customer down. Tom messed up and because you are handling it, Tom has been bypassed. Or if it’s your job to keep the wrapping station clean and your supervisor finds herself cleaning it because you aren’t doing it, you have been bypassed.

A supervisor must declare a Danger Condition if he finds himself doing the work of his subordinates. He must then do the formula to handle the situation that is dangerous, and assign his subordinates to do the Subordinate Danger formula.

The reverse is also true. If you start bypassing someone else and doing their work you will unwittingly bring about a Danger Condition. Why? Because you displace the person who should be doing the work and put them in danger of losing their job.

If you have to do the work on a bypass, you must declare a Danger Condition and get the subordinate to follow the formula. If you declare the Condition, you must also get the work being competently done, by new hire, transfer, or training of personnel. The Condition is over when that department has visibly, statistically recovered.

When a Senior person finds himself doing the work of their subordinate the senior would apply the:

Danger Formula for the Supervisor

1. Bypass (ignore the subordinate(s) normally in charge of the activity and handle it personally).
2. Handle the situation and any danger in it.
3. Assign the area where it had to be handled a Danger Condition.
4. Assign each individual connected with the Danger Condition a Personal Danger Condition, enforce, and ensure that he or she follows the formula (below) completely.
5. Reorganize the activity so that the dangerous situation does not repeat.
6. Recommend any firm policy that will hereafter detect and/or prevent the dangerous situation from recurring.

Personal Danger Formula for the subordinate who was bypassed or for the person whose statistics were flat or slightly down over many weeks or steeply down in one week.

Note : When doing Danger you are looking at last week to find what needed to be fixed and you then fix it this week. You write it up by looking at last week with the intention of finding what you did that was not ideal last week so you can fix it in THIS week. You write up both what you found that could be fixed and how you will fix it.

Personal Danger Formula

1. Bypass bad habits or routines. (What did you do that caused the danger.)
2. Handle the situation and any danger in it. (Is there anything that now needs to be fixed or handled?)
3. Assign self a Danger Condition. (Simply Acknowledge the Danger Condition.)
4. Get in your own personal ethics by finding what you are doing that is “non-optimum” (not ideal, not working) and use self-discipline to correct it and get honest and straight.
5. Reorganize your life so that the dangerous situation is not continually happening to you.
6. Formulate and adopt firm policy that will hereafter detect and prevent the same situation from continuing to occur.

Here is an example of how the Personal Danger Formula could be applied. Let us say an employee was not entering the buys that he’s making into the computer every day. And instead of doing this work, he was reading comic books all week. Not only is he in danger of being found out and fired, the company is in danger because there is inventory that is not in the computer system and the cost, stone weight, etc. could be lost.

To bypass the habits or normal routine of not entering the buys, he’d have to immediately start entering the buys daily (step 1).

But he’d also have to handle the situation and any danger in it (step 2). There may be items on which the cost was lost so he’d need to get it. Call the customer or ask Accounting how much the check was for, whatever. The danger needs to be fixed. You might need to stay late to get this done, but you do whatever is required to fix any danger in the situation.

(Step 3) then “assign self a Danger Condition” is only there because people forget to assign it. You need to recognize it for yourself. And then you (step 4) “get in your own personal ethics by finding what you are doing that is non optimum and use self-discipline to correct it and get honest and straight.” If you really are reading comics at work and that’s taking your time away from entering buys, then that reading has to stop.

(Step 5) then “reorganize your life so that the dangerous situation is not continually happening to you.” Example: Keep a list of the buys you’ve made and put a checkmark after each one after it’s been entered, so you can immediately tell if you’ve done them all for the day before you leave. Leave the comics at home.

(Step 6) And then, “formulate and adopt firm policy that will hereafter detect and prevent the same situation from continuing to occur.” You’d have to decide, “I will never read magazines, or waste time on anything, until all my work is done.” Be creative and effective on this part.

This is how you solve the problem for yourself and prevent it from ever putting you in danger again.

The basic idea of the Danger Formula is that you find what you did that caused the low statistic, or why you had to be bypassed, and you fix it. You then decide to not do it again and put actions into play that prevent you from doing it again.

After you finish writing up and doing all the steps of Danger you would then write up The Emergency Formula.

The Condition of Emergency

It is an observed fact that nothing remains exactly the same forever. The strongest steel degrades over time, the largest mountain erodes, and even the sun is slowly burning out. A plant grows and the moment it stops, it begins to shrink or die. This is nature. Things cannot apparently maintain the same equilibrium (balance) or stability, they increase or they lessen, they expand or they contract, they improve or they decay. Further, when something seeks to remain level and unchanged, it actually contracts. An example of something that seems stable by staying the same, but really isn’t stable, is money. You might think that if you made $100,000 a year, year after year, that that would be “normal” or good. But inflation will slowly devaluate that $100K and it will buy less each year. So level, or even, is actually an emergency because only improvement or increase would protect you from inflation.

This leaves expansion as the only positive action which works to increase or improve things. In order to expand in such a situation, the formula for a condition of Emergency is applied.

The Condition of Emergency is applied when:

1. The statistics of a company, department, or an employee are seen to be declining.
2. The statistics of a company, department, or an employee are seen to be unchanging (flat).

NOTE: When doing this formula you are looking at last week to fix it in this week. You write it up with the intention of finding what you did that was not ideal last week so you can fix it in THIS week.

Emergency Formula

1. Promote and/or produce. What is promotion? It is making things known, getting things out, getting oneself known, and getting one’s products out.
2. Change your operating basis (how you work, the actions you take, the routine decisions that you make). In other words, change what you were doing. If, for instance, you went into a Condition of Emergency and then you didn’t change your operation after you had promoted, but did the same things as before, then you will just head for another Condition of Emergency. You had better change your operating basis because your existing operating basis led you into an Emergency. Find out what caused the emergency and change that.
3. Economize. Economize on time, be efficient with your actions. Be Productive.
4. Prepare to deliver. Say what you need to change or fix and how you will implement anything written in the above steps if you have not already. Make sure that you have the materials and training that you need in order to be productive.
5. Stiffen discipline.

Part of the Condition of Emergency is that you have got to stiffen discipline. To an individual, this could simply mean not going down to the bar every night. Stay home and get rested for the next day of work, or study something to make you better at your job. Be a little early to the job, work a little harder, don’t goof off as much, and don’t make so many mistakes. All of this would be part of stiffening YOUR OWN discipline.

If an Emergency Condition is ignored and the steps are not taken successfully, then the Condition will continue. And if the Condition is continued beyond a specified period of time, it becomes a disciplinary matter FOR THE SUPERVISOR ON THE SUBORDINATE. Because there must be somebody goofing off like crazy, somebody who won’t function, somebody who has got the brakes on so hard that you can smell the smoke. And so a supervisor will have to discuss or apply discipline to get this fixed and back to a normal (increasing) statistic. The way to avoid further discipline is to FIX IT YOURSELF with this formula.

When you have a stat requiring you to PROMOTE here is some advice. Promotion is the key to getting more business, this plus referrals. The company can only advertise so much. We do a great job. The difference is that you treat customers so well that they return and send us their friends. Getting reviews is promotion too. And a good five star review may last for years! Bad reviews are “anti-promotion.” Do anything within reason to NOT get them and to get them removed if you do get one.

ANY customer contact, any asking for referrals, any 5 star reviews, all happy customers, good thank you notes ALL are promotion.

A good buyer, doing the above will increase his business, over time, 10-20%. Doing the above will increase the business of a poor buyer. Promotion, if good, works. There is no negative effect to good promotion. I can see the above, done well, bringing a 100% increase over time.YOU determine a big part of the future business you will do.

Hearts On Fire (diamond brand) used to have a saying, “The more HOF you see, the more you WILL sell.” Same for a buyer. The more buys you make, with a happy customer, the more buys you WILL make. Even if you don’t ask for repeat business or referrals the more you do, the more you will do. But compound this effect with 100% follow up, thanks you notes, requests for referrals and more buys, a second thank you note and a request for referrals, etc.

All of these will bring you more business.

Happy Customers, 5 star reviews, which can theoretically bring you a new customer the very next day, good follow up and thank you notes, asking for referrals, letters sent at a later date thanking again and asking for more business and referrals. Repeat all.

It is really not hard but it does take commitment.

I recently listened to two motivational lectures (books) which I thought were pretty darn good. One is by Tony Robins called “Awaken the Giant Within” and the second was “The 10 x Rule” by Grant Cardone. Neither is very long. Both are densely packed with some very good advice.

The basic idea of the Emergency Formula is PROMOTE, get the word out there and get attention. Change what you were doing that got you a level, or down statistic, and get back to a slight increase (Normal).

If you do the emergency formula properly, you should have a Normal or an Affluence stat in the following week.

The Condition of Normal

We discussed before you cannot have a condition in this world where there is no increase and no decrease. There is no such thing as a totally stable condition; there isn’t anything that always remains the same.

A condition of Normal Operation exists where there is regular, steady expansion or increase. If there is no gradual increase, there will not be a condition of stability. You cannot have a total, even state of existence which does not eventually fail in some way, big or small. The second you get to an even state, it starts to deteriorate. To prevent deterioration, you must have an increase. That increase doesn’t have to be spectacular, but it has to be something.

Normal Formula

1. Don’t change anything. The way you maintain an increase when you are in a state of Normal Operation is that you don’t change anything.
2. Discipline is very mild and quite reasonable. There may be none at all.
3. Every time a statistic betters, look it over carefully and find out what bettered it. And then do that without abandoning what you were doing before. Maybe you wrote 5 more letters than your target last week. Good – do that again this week.
4. Every time a statistic worsens slightly, quickly find out why and remedy it. Maybe you didn’t get as many repeat customers last week as usual, and then you realize you’ve been forgetting to send out thank you cards. So send out those thank you cards from the previous weeks that you forgot, and then be sure to send them out this week too.

Those are the only changes you make. And you just work between these two factors: the statistic bettering, the statistic worsening. In an area where a statistic worsens, you will find out, inevitably, that some change has been made that caused the stat to worsen, and you’d better get that change reversed in a hurry. And when you find that a statistic is bettering, you’d better find out how it is bettering and strengthen it.

The basic idea on Normal is don’t change what worked. Do more of what worked and less, or none, of what didn’t. If things go well, look at what caused it and do more (No 3), and if things slow down (No 4), find out why and fix it.

THIS STEP IS ALL DONE IN THE WEEK YOU ARE IN. You write it up at the beginning of the week, but you DO the Normal Formula all week.

The Condition of Affluence

The definition of affluence is to have a large amount of something, most often money. In your job, it might be a large amount of buys or sales, or a large amount of invoices entered, or a large amount of packages shipped. Whatever you are producing, if you produce a lot of it, that’s affluence.

When you have a line going steeply up on a graph, that’s the Condition of Affluence. Whether it’s up steeply for one week or up steeply from its last point week after week after week, it’s Affluence. When you’ve got an Affluence Condition, regardless of how you did it, the Affluence Formula applies. You must apply the Affluence Formula or you will be in trouble.

Affluence is the most dangerous of all Conditions in that if you don’t spot it and apply the Formula, you’ll crash and burn! Spot it and handle it right and it’s a rocket ride to the top.

There are two Affluence Formulas. The second one is the one that salespeople and buyers would use.

The Money Affluence Formula applies to finances, which means how you handle money. This one would apply to the Chief Financial Officer of an organization, or the CEO himself. It would also be used to handle your personal income stat, like your pay or money you make doing work, such as a waitress and her tips.

The Action Affluence Formula applies to stats that are related to numbers, such as production stats (how many of what you make [widgets], or actions that you do [touchdowns]), and it often applies to the measurement of the number of dollars you create in your job, such as a salesperson’s sales stats or a buyer’s Buy Dollars Saved stats.

Money Affluence Formula

1. Economize. Now the first thing you must do in Affluence is economize, tighten your belt, scrimp and save. Then make very, very sure that you don’t buy anything that has any future commitment to it.
2. Pay every bill. Get every bill that you can possibly scrape up from anyplace, every penny you owe anywhere under the sun, moon, stars, and pay them until you have got it down to as close to zero as you can get or at zero.
3. Invest the remainder in service facilities. These would be things that make it more possible to deliver your product or services, like a new computer, new delivery truck, or faster manufacturing machines.
4. Discover what caused the Condition of Affluence and strengthen it.

Action Affluence Formula

1. Economize on needless or dispersed actions that did not contribute to the present condition. Economize by knocking off all waste.
2. Make every action count and don’t engage in any useless actions. Every new action is to contribute and be of the same kind as did contribute to the affluence.
3. Strengthen and solidify all gains. Any place we have gotten a gain, we keep it and maintain it. Don’t let things relax or go downhill or “roller coaster” (going up and back down, up and back down).
4. Discover for yourself what caused the Condition of Affluence in your immediate area and strengthen it.

The basic idea on this Affluence Formula is don’t do what didn’t cause the affluence, and KEEP DOING what did cause it. If you do anything new, it should be similar to what you have already done that worked.

Let’s take a look at how this would work for both buyers and sellers.

1. What didn’t help me have a good week? Was it taking long lunches? Was it staring at my lotto ticket, hoping I would win? Was it chatting with my coworker? Was it NOT writing thank you notes? Not following up? If it was any of these, then knock it off!
2. Be efficient. Work hard. Do what worked. What worked? Was it following up? Was it being kind? Listening? Learning something new? Writing extra letters? What? Do it!
3. This one has been a little hard for some to get, so let’s take a good look. To have an Affluence week, you either made a lot of customers happy, or you made a couple, or even just one customer very happy! They sold or bought a LOT! What did you gain? A happy customer? Most likely. How do you strengthen that relationship? You send them a sincere thank you note. You make a note to send them a Christmas card or anniversary card next year. Later, you send them a letter telling them how much you enjoyed helping them, and if they have any friends you would like to help them too! Let’s say you bought a watch that you thought might be super rare but weren’t sure, but bought it anyway at a safe price. You then researched it and found it was RARE and worth five times what you thought. That knowledge is now a GAIN. Write it down, share it with your coworkers, and remember what you learned. All these acts strengthen the gain. Another example: You bought a watch, and when investigating it, you found a dealer that told you straight up, “That’s worth a lot, and I’ll buy it.” He could have just bought it for a low price, but he gave you knowledge and then paid a lot for the watch. You THANK him over and over, and you sell him more later. This strengthens the gain of the relationship.
4. Figure out exactly what caused the Affluence and strengthen that. If it was that you just leaned a new sales gimmick and it worked 3 of 4 times, then by god, use it and learn some more. If you just finished reading, “How to Win Friends and Influence People” and used the knowledge to close more buys or sales, then read it a second time and find more books like that!

The basic idea with Affluence is work hard, don’t waste your time, keep what you gained, and do MORE of what worked.

If you are struggling with any step, or an entire formula, please contact Leo, and I will help you work through it. Once you get the basics of this, it will help your life improve forever. Really.