How can variance analysis improve your communication skills?

1 What is variance analysis?

Variance analysis is the process of breaking down the total variance between the actual and budgeted results into various components, such as price, quantity, volume, mix, efficiency, and market share. Each component represents a different factor that influenced the performance of the business, and can be further classified as favorable or unfavorable, depending on whether it increased or decreased the profit. By analyzing the variances, you can understand what went well and what went wrong, and how to improve your decision making and planning.

2 How can variance analysis improve your communication skills?

Variance analysis can improve your communication skills in several ways. First, it can help you present complex and detailed information in a clear and concise way, by highlighting the key drivers and outcomes of the performance. Second, it can help you tailor your message to different audiences, by focusing on the relevant and meaningful aspects of the variance for each stakeholder. For example, you can use variance analysis to explain to your boss how your department achieved its goals, to your team how they contributed to the results, and to your customers how you delivered value. Third, it can help you engage your audience and solicit feedback, by showing them how their actions and inputs affect the performance, and by asking them for their opinions and suggestions on how to improve.

4 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?