In a previous life, I worked in human resource management, negotiating with trades unions. It was a management function outside finance where a LOT of numbers were thrown around. How much was being claimed? What would be the impact on the organisation today and into the future. And how do we communicate all of this to the union side so that we might make their ‘wholly unreasonable’ demands more palateable?
From this experience, I learned three things about numbers. Firstly, we argue about both SCALE and SIGNIFICANCE. Bankers’ bonuses are offensive because of their scale; their significance for most of us is negligible. Significance arises because £100 to me, is not £100 to you. Usually, the difference is one of proportion – is the £100 a tiny percentage of something meaningful or a large one? Telling us that a banker’s bonus would pay for 10,000 nurses is a way of describing its scale; for something to be meaningful, it really does have to be close to home.
Secondly, presentation is all. In negotiation, this was often about timing or the agreement small print but it could also be about the scale of the axes on a chart.
Finally, and most importantly, I learned that I had to go into a negotiation with some kind of view on what we were all there for and what governed our behaviour. Some of my manager colleagues believed that every trade unionist was after as much ££ as they could get and hang the consequences for the business. This was never the case in my experience and I came to understand that both management and employees accepted that the numbers we were arguing about were constrained by a system that we all agreed was stable and robust. In other words, we all had a theoretical world view which tied us together.
These three lessons remain highly relevant.
Firstly, in too many walks of business life, the issue of number significance remains elusive. The recent crime map showed that. The steady drip, drip of ‘data’ from Government shows it. It’s all about scale; almost nothing about significance.
For ‘presentation’ we now read ‘visualisation’. But visualising meaningless numbers just makes them look pretty; it does nothing to enhance their meaning. And of course, ‘scale’ produces FAR better visualisations.
Take violent crime in London and Greater Manchester from the recent crime statistics. In London, there were nearly 12,000 violent crimes; in Greater Manchester there were 3,000. You can just ‘see’ the relative bubbles! One FOUR TIMES the size of the other.
However, the violent crime rate in London is 15 per 10,000 people; in Greater Manchester, it is 11 per 10,000 people.
The rate bubbles would look far less exciting. Measuring scale, one bubble is four times the size of the other. Measuring significance, the bubble of one is only half as big again as the other. To explore this click here.
Finally, the absence of a reasonably common world view amongst us is manifest across many walks of life. One in particular interests me – as a Londoner, now living north.
We lack any agreed road map to enhance local economies. This impacts on those of us outside London because London and the South East are largely strong, and will get stronger at the expense of the rest.
Of course, many accept a number of ‘givens’, like the need for northern economies to have more businesses. But few understand WHY this is important except that more businesses = more jobs. (In fact, there is far more to the issue of business density than this).
The consequence is that I have a lot of sympathy with those business people involved with local economies who have been frustrated, angered and put off by the avalanche of numbers produced about those economies over the last few years.
That frustration is born of those numbers being produced in the absence of ANY common world view about what makes a local economy tick and prosper. Business people need a ‘model’ to explain local economic growth; they need numbers consistent with the model; they need a strategy which links the two.
Models exist. So do the numbers. So do the strategies.
We’ve had enough of numbers in bubbles, of grubbing around for data.