The HeadScratcher Post Archive
June  2012
Thresholds
       June 2012 The Headscratcher Post Headscratchers LLC    Edition 81

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Thresholds

A threshold is the measure of a level, rate, or value that triggers an action. The action might be a change in a plan, an alert, a communication, a full stop or even a full ahead.

Most parents will let their kids make some noise, but at one point, the noise gets too loud, or goes on too long, and a parent intervenes with "that's enough, it's time to stop". The noise and/or annoyance level reached threshold.

Stocks prices go up and down, and sometimes can move quickly. By the time you check and realize the stock is going down and put in a sell order, it may be well below the level you would have wanted to sell it. Instead, some others put in a "sell" trigger to prevent a loss beyond a certain point. If the stock hits that threshold, it automatically sells. You can limit your lose considerably.

We use thresholds all the time, in our personal life, and in business, but we don't necessarily think about them ahead of time. Only when the "noise" or "pain" or "opportunity" becomes so evident do we do something. Operating this way often puts us in fire-fight or panic mode as we usually wait until the noise is too loud, or the stock already is too low or high, or the project is already terribly behind schedule, or the wrong person has been on the job too long.

When starting an initiative, a new project, new employee, new system or process, even an investment, think about what you can measure to give you a sense if "things going OK", or "things not going OK". In addition, define what level that measure has to reach in order for you to take action, and what action that might be.

Many projects have dashboards or progress reports for status. These are generally filled with measures of progress, sometimes green for "go" and red for "problem". When an element turns red, is there a plan? Should there be a plan if it turns yellow. Maybe yellow should be the trigger to do something so that you can prevent it from becoming red.

When implementing a new process, perhaps to improve productivity, how will you know you are improving, and what is the trigger to relook at the process if it is not achieving the results expected?

The Takeway: Measuring is an important aspect of knowing the status of an initiative or project, but don't stop at just figuring out what to measure. Establish thresholds, in advance, that trigger actions. Perhaps an action is corrective, or to stop, or to go full throttle. In this way you can fix something going bad before it becomes really bad, or leverage something good and take full advantage of a situation.

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