Numbers I have loved

We know pretty well how to assess the financial impact of a product or service that purports to reduce costs. What about products or services that purport to improve the quality of our decisions? And how can we avoid the traps of streaks and slumps?

We think extrapolation is self-evidently defensible, and it is merely on-the-surface defensible. It falls apart when things get interesting, which is precisely when we need help the most… and precisely when we are most vulnerable to bad advice.

Ceteris paribus isn’t easy. It’s the gold standard we use in double-blind clinical trials of drugs and medical treatments, but the business equivalent of clinical trials is difficult at best.

One number stands out even in that exalted company. It is a number that we fear and venerate. It is a number that is fluid and then becomes stone. It is a number that defines the limits of what’s possible. That number is the budget.