The Management                                    

Written by Null Sigma founder, 

Stephan Kudyba

Mission Statement

Organizations across industry sectors are continuously faced with uncertainties in the markets in which they operate.  Managers have the difficult task of devising appropriate strategies such as retaining customers and attracting new ones, pricing and marketing products effectively, streamlining processes to minimize costs or on an aggregate level, increasing market share, revenue and profitability. The process is difficult because the marketplace is a dynamic environment which introduces variables that affect activities for the individual firm.  This dynamic character has been raised to a new dimension given the evolution of the “Information Economy”. 

The process of devising effective business strategy generally involves the goal of controlling the factors that drive a particular performance measure.  These measures can include Gross Sales, (Customer Purchasing, Churn and Satisfaction Rates), Costs and Defect Rates to name a few.  In order to accomplish this, decision makers must identify factors that drive these measures and establish policies that result in an increase in organizational performance.  This often includes a level of uncertainty as to:

• Which variables are important

• The relative importance of these variables

The overall process for increasing organizational efficiency or productivity therefore includes. 

• Identifying the process which needs improvement

• Determining those variables that drive the process

• Devising strategies that reliably achieve projected goals

In other words, if the goal was to achieve a 10% increase in market share, and a strategy of decreasing price and fine tuning a CRM system was the policy to achieving this….what was the actual result?  Many times results do not match the initial objectives.  The difference between the two is a variance.  This variance or “Sigma” is a source of inefficiency of a firm.   In order to operate as efficiently as possible, firms must therefore reduce this variance the ultimate state of which is:  

                                                     Null Sigma or "no Variance"