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What Is A 'Tolerance'? (Systems)

A Tolerance is an acceptable level of “normal” error in a system.

Within a given range of measurements, the system is performing as intended. As long as the errors don’t exceed a certain threshold, urgent intervention is not required.

Tight tolerances are very useful, and are a positive indicator of quality: after all, you don’t want mistakes or variations.

Josh Kaufman Explains 'Tolerances'

Many inexperienced businesspeople expect perfection: any sort of mistake or variance, however small, is a cause for concern.

Take, for example, a business’ website. Most businesspeople are aghast when their website goes down, an event that prompts concerned calls to the system administrator or responsible party. Often, the words “make sure our website never goes down” are spoken.

That’s not realistic: perfection is impossible. 100% reliability is a pipe dream. Normal Accidents are a fact of life, so it pays account for them in planning. The more reliability you need, the more your system is going to cost.

A Tolerance is an acceptable level of “normal” error in a system. Within a given range of measurements, the system is performing as intended. As long as the errors don’t exceed a certain threshold, urgent intervention is not required.

Tolerances are often referred to as being “tight” or “loose.” A tight Tolerance is one in which there’s little room for error or variability, which is common if the component or system is critical to the performance of the system. A “loose” Tolerance allows significant room for error or variability, and is common when small mistakes produce no major repercussions.

The reliability of a system is often measured in terms of a percentage. When a system is 95% reliable in a given area, it will produce a result within the intended Tolerances 19 out of 20 times. The higher the reliability, the higher the percentage.

When you hear someone talk about “five nines” reliability, that means the system produces the intended result 99.999% of the time. This level of reliability is extremely impressive, and just as expensive to achieve. Often, systems companies use this reliability measurement as a Tolerance, and write a contract called a “Service Level Agreement” (SLA) that promises to compensate customers if errors exceed a certain threshold.

Tight Tolerances are very useful, and are a positive indicator of quality: after all, you don’t want mistakes or variations. Work to achieve tighter Tolerances for the critical parts of your system over time.

Questions About 'Tolerances'


"The road to wisdom? Well, it's plain, and simple to express: err and err and err again, but less and less and less."

Piet Hein, mathematician and poet


From Chapter 10:

Analyzing Systems


https://personalmba.com/tolerance/



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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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