Every product we sell sits in a category, and every category has a buyer who answers for it. Plumbing, kitchens, timber, heavy building materials and about thirty more. Each month the board pack shows sales by category against the same month a year earlier, and it is the page the directors spend longest on.
In April the commercial team reorganised the categories. Kitchen taps, sinks and waste fittings moved from plumbing into kitchens, because that is how our customers shop for them and how the new website arranges them. About four hundred products moved, worth roughly a third of what the kitchen category had been selling. The change was made in our product system in one afternoon, correctly, by the people whose job it is.
Our sales records store the category each product was in on the day it was sold. So from April this year's tap sales counted under kitchens, last year's stayed under plumbing, and the comparison set them against each other on opposite pages. Kitchens appeared to grow by thirty one percent, and plumbing to fall by eleven.
The board asked for an explanation of both. The kitchen buyer was congratulated at a meeting. The plumbing buyer spent most of June preparing a recovery plan for a category that had not lost a single sale, and two of his suppliers were asked why their volumes had collapsed. A proposal to give less floor space to plumbing in three branches had reached the property team before an analyst in finance noticed that the rise in one and the fall in the other came to almost exactly the same amount.
Nobody had made a mistake. The new categories were right, the reports did what they had been built to do, and the people reading them had no way of knowing the ground had moved under the comparison. A figure against last year compares two things, and we had changed what one of them meant.
Category membership now has dates. When a product moves, its old category is kept with the date it ended, and every report can show history either as it was recorded or restated under today's categories. The board pack uses the restated view, and any category whose membership has changed by more than five percent in the last two years carries a note on the page saying what moved and when. The plumbing buyer received an apology, and the floor space proposal was dropped.
When you change how things are grouped, the past does not regroup itself. Restate it, or say clearly on the page that the comparison crosses the change.
– Serguey Shinder
