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What Are 'Norms'?

Norms are measures that use historical data to provide Context for current measurements. They are a way of learning from the past to avoid previous mistakes.

When measurement practices change, Norms based on the previous measurements are no longer valid. Change the measurement methods, and you invalidate any Norms based on them.

Past performance is no guarantee of future performance. Examine your Norms to make sure they are valid.

Josh Kaufman Explains 'Norms'

If you want to compare the effectiveness of something in the present, it's often useful to learn from the past.

Norms are measures that use historical data as a tool to provide Context for current measurements.

For example, by looking at past data you may discover that seasonality is a good example of why norms are often useful.

If you're in the business of selling Christmas ornaments, comparing sales during Q4 (the last quarter of the year-October through December) to Q3 sales (August through September) probably isn't useful-no one purchases Christmas ornaments in August. Far better to compare this year's Q4 sales with last year's Q4 sales to see if you performed better than last year's comparable period.

When measurement practices change, norms based on the previous measurements are no longer valid. At P&G, we had a method of evaluating the effectiveness of certain types of advertising. Drawing on several years worth of data, it was possible to compare new advertisements with old advertisements that were successful. If the new advertising didn't beat the Norm in testing, it wasn't used.

If the company suddenly decided to use a different testing methodology, the Norms would no longer be valid-it would be comparing apples and oranges. Change the measurement methods, and you immediately invalidate any Norms based on them.

If you still want to use Norms, you must build your database of historical information once again. Past performance is no guarantee of future performance.

Remember, we're dealing with complex systems-things always Change over time. Just because something was useful in the past does not mean it will continue to perform as well in perpetuity.

For best results, re-examine your Norms periodically to ensure they're valid.

Questions About 'Norms'


"Those who cannot remember the past are condemned to repeat it."

George Santayana, philosopher, essayist, and aphorist


From Chapter 10:

Analyzing Systems


https://personalmba.com/norms/



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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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