# Variance *Know when to react* --- July revenue comes in at £1.1m. The prior month was £1.25m, down 12%. Prior-year July was £1.2m, down 8%. Two negative variances in the monthly pack. What's wrong? Actions get assigned. The sales team is asked to walk pipeline. Finance pulls a customer-level analysis. A follow-up meeting goes into the diary for the week after next. --- Maybe nothing. June was a quarter-end month, and deals got pulled forward to hit targets, inflating June and hollowing out July. Last year's July included a one-off implementation fee from a contract that didn't repeat. Plot a rolling twelve-month average over the same period and revenue is steadily growing. August comes in at £1.26m. Nothing has happened, apart from a lot of distracting busywork and a reputation, briefly held, for being on top of things. --- Every variance is measured against something, and the something is usually chosen by default rather than by design. Month-on-month comparisons assume all months are equal, which they aren't, because they differ by working days, seasonality, and period-end effects. Year-on-year comparisons assume the prior year was representative, when it might have included one-offs, pricing changes, or other quirks that have long since been forgotten about. The variance tells you more about the choice of baseline than about July. And the choice of baseline was made years ago, by whoever set up the report, possibly without anyone asking what question it was meant to answer. --- A twelve-month trend chart with a band around the average (statistical process control calls this a "process behaviour chart") tells you more in five seconds than any snapshot variance table. A new point inside the band gets noted. A point outside, or three months trending in one direction, gets investigated. The right question becomes "is there something unusual happening?" rather than "why is July down on June?" The number was always uncertain. The band just makes the uncertainty visible. Most months, the answer is no, and the meeting moves on quickly. No root cause. No action items. No one to blame. That's okay.