The Personal MBA

Master the Art of Business

A world-class business education in a single volume. Learn the universal principles behind every successful business, then use these ideas to make more money, get more done, and have more fun in your life and work.

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What Is 'Context'?

Context is the use of related measurements to provide additional useful information about the data you're examining.

Aggregate measures are worthless by themselves. How much is $1000 of revenue? It depends on your Context.

Don't focus on "magic numbers" when tracking your results. No measures matter in isolation, look at them in context with other measurements.

Josh Kaufman Explains 'Context'

You brought in $200,000 of revenue this month.

Is that good or bad? It depends. If you brought in $100,000 last month, it's good. If your expenses are $400,000 this month, it's bad.

Context is the use of related measurements to provide additional information about the data you're examining.

In the example above, the revenue metric isn't very useful without additional information. Knowing last month's revenue and this month's expenses provides necessary Context, giving you a clearer picture of the situation.

Aggregate measurements rarely tell you anything useful. Aggregate measures are almost always worthless when it comes to using the measure to make a tangible improvement because they lack Context.

Knowing 2 million people visited your Web site this month tells you nothing useful. Without context, you can't determine change or effectiveness, which limits your ability to improve the system.

Try to avoid the temptation to focus on a single "magic number" when tracking your results. Relying on a single number sounds like a useful simplification, but it's not-removing context blinds you from noticing important changes in the data.

Knowing your "total quality score" or revenue went up or down a few points won't tell you why it happened, whether or not it's important, or if it's due to random fluctuations or a significant system change.

As a general rule: examine no measures in isolation-always look at them in context with other measurements.

Questions About 'Context'


"If you don't understand something, it's because you aren't aware of its context."

Richard Rabkin, psychiatrist


From Chapter 10:

Analyzing Systems


https://personalmba.com/context/



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The Personal MBA

Master the Art of Business

A world-class business education in a single volume. Learn the universal principles behind every successful business, then use these ideas to make more money, get more done, and have more fun in your life and work.

Buy the book:


About Josh Kaufman

Josh Kaufman is an acclaimed business, learning, and skill acquisition expert. He is the author of two international bestsellers: The Personal MBA and The First 20 Hours. Josh's research and writing have helped millions of people worldwide learn the fundamentals of modern business.

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