What is the difference between traditional performance ratio analysis and wait-event analysis? I like to contrast the two by telling a story about a mother bringing her sick baby to a doctor. The doctor looks at Johnny and asks, "Johnny, where does it hurt?" Since Johnny is just a baby and can't talk, he looks at the doctor and starts screaming loudly. To diagnose little Johnny, the doctor must perform a series of uncomfortable tests.10 After the tests are performed, the doctor says something like, "Based on the series of tests I ran and based on my years of experience and my keen knowledge of a child's physiology, I believe this is the problem and this is what we should do." Very professional indeed!

Let's go over a couple key points in this analogy. First and foremost, because Johnny can't speak, the doctor must run a series of broad tests to discover the problem. If he forgets to run a specific test, doesn't know about a new test, or just doesn't feel that a specific test is necessary-for example, looking into Johnny's ears-he can easily misdiagnose. The point is that because Johnny can't tell the doctor where the pain is, the doctor must run more tests than he would need to if Johnny could talk.

The second point is that the doctor must know about the child's physiology to solve the problem. While he may be able to diagnose the problem, unless he knows children's physiology, he will need to refer Johnny's mother to a specialist.