Module 8.2  – What Do the Numbers Really Mean?

 

Module Introduction

            Numbers form a language of their own. In fact, they form numerous languages and dialects. As with spoken languages, just because you are fluent in one does not make you fluent in others. At times, you will need an interpreter. It is also possible to numb someone with numbers. When the vast majority of people have to spend too much time trying to deal with or understand numbers, the numbers become confusing and meaningless. Numbers can also be quite frustrating, and many people don’t trust them—sometimes with good reason.

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1. What Do the Numbers Really Mean?

            Numbers and the various operating symbols they are used with—symbols such as

 

+, -, ±, =, ?, ÷, x, %, v, =, =, and so on—are like letters in an alphabet. Like the letters in an alphabet—any alphabet—it is the way in which they are assembled that gives them any sort of meaning.

            Numbers form a language of their own. In fact, they form numerous languages and dialects. As with spoken languages, just because you are fluent in one does not make you fluent in others. At times, you will need an interpreter.

            It is also possible to numb someone with numbers. When the vast majority of people have to spend too much time trying to deal with or understand numbers, the numbers become confusing and meaningless.

            Numbers an also be quite frustrating.

            It is what the numbers represent that is important. After all, what do 3,252 mean? Is it money? If it is, what currency is it? $, £, €, or ¥? Is it a salary figure? A profit? A loss? The cost of a new computer?

            Is it the production output? The number of new widgets made this month? The number sold? The number returned? The number left in the warehouse? Or the number damaged in transit?

            Does it represent personnel? Is it the number of employees? The number who have been hired? The number who have been fired?

                        Most important, how do you arrive at those numbers?

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2. Why Should They Trust Your Numbers?

            People do not trust numbers—especially organizational financial numbers.

Why should they?

Look at the Enron collapse and the role the accounting organization of Arthur Andersen LLP played in it. It left tens of thousands of Enron Investors and employees bankrupt while some of their top executives and their select circle of friends and family members walked away with millions.

            But when you looked at the Enron financial statements before the collapse, the organization seemed sound. Yet somebody used numbers to mislead, which led to the biggest bankruptcy in history. The sad fact of the matter is that we all know there will, probably be an even bigger one someday, where we again may be mislead.

            Remember the dot-com collapse of the 1990s when people lost millions in high tech organizations , even though many financial reports showed that hose organizations were also rock-solid investments, and many financial analysts and investment advisors urged people to pour their money into them.

            We can go back to the down turn of the world wide market in the late 1980s or go back even further, to the New York Wall Street stock collapse of 1929 that led to the worldwide depression. The organizations and analysts and consultants all misled us in those cases, too.

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3. Why Should They Trust Your Numbers? (Continued)

            Why don’t people trust organizational numbers?

            Every era, generation has good cause to doubt and distrust the numbers that organizations —and governments—present to them.

            What makes your numbers any different?

            How do you make your numbers believable?

            How do you help people trust your numbers when they tend to approach those numbers with an initial sense of suspicion?

            The first thing you have to do is make sure that your numbers are valid, honest, and tell the truth. Then make sure that you can explain them in simple terms.

            You don’t have to talk down to your audience, but you do have to talk in simple language, even when you are delivering bad news. In fact, it’s even more important to keep it simple when you are delivering bad news. Unfortunately, most people don’t like to deliver bad news.

            Would you rather be told that mortality rates tended to be above average for those people of your age in your weight range? Or would you feel better informed if the doctor simply said: “Lose weight. Overweight people die younger than skinny people.”

            People want the truth. They deserve the truth. This fact is especially pertinent when it comes to money. You must be willing to deliver bad news when that is necessary.

            In the wake of the Enron and Arthur Andersen scandal, however, most organizations have to earn that trust. It is much easier to lose people’s trust than to earn it, however. Again, make sure your messages about financial information are simple, clear, and valid.

4. Brush Up Your Math

            All of us need basic math skills, and we have to keep then honed. For most of us, math forms the backbone of our work, the reports that we generate and have to deal with, income and expenses, profit and loss statements. Even if we don’t “crunch numbers” ourselves, we deal with the numbers, or the results of those numbers that others “crunch” for us.

            We receive information about numbers all the time, either internal to your own organization or outside of it. Such information might be about vendors, partners, or competitors. How many of us, however simply skip over the numbers when we see them?

            In “Math Tools For Journalists,” author Kathleen Wickham addresses journalists, but her message is just as important to many of us in project/programme purpose, especially those of us responsible for releasing or even receiving financial information. She starts out by stating that most journalists have weak math skills.

            “Journalists are generally aware of their math deficiencies and frequently develop elaborate ways of writing around the problem. The hid-and-seek method works all too often because their editors also have weak mathematical skills, In other words, the editorial gatekeepers, those charged with ensuring accuracy and completeness in daily news reports, perpetuate the system because of their own weaknesses,”

            She explains that most journalists—like most people in project/programme purpose—did study math.

            “It’s not that journalists can’t do basic math, It’s that journalists have forgotten how.”

            How much do you remember?

5. Check the Math

            Unless you are an accountant, bookkeeper, or engineer, or someone else who normally “crunches number,” the odds are that you let other people at work do your math for you. That’s their job.

            You also assume that they are doing the calculations properly and that the number they give you will be correct.

            No one likes to doubt the professionalism or competence of the people they work with, but mistakes happen. If you are the one handing those numbers out—either internally or externally—you might want to have them double checked.

            In December of 1999, the American Mars Polar Lander, a multimillion planetary probe launched by NASA, the U.S. National Aeronautics and Space Administration, crashed during its landing on the Red Planet.

            The reason for the crash turned out to be an embarrassing failure to have converted inches to metric units during one key phase of the descent.

            Everyone involved “assumed” that they—and everyone else—understood what was expected of them, what they needed to do, and what measurement system to use.

            A multimillion-dollar space explorations project was destroyed because no one bothered converting inches to centimeters. Since one inch is equal to 2.54 centimeters, to convert inches to centimeters multiply the number of inches by 2.54.

            It really was a small mistake—in terms of length, but a major mistake in terms of its outcome.

            Check the math.

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6. Is That U.S. or U.K., or Metric?

            By now, most of us have learned that we have to think in terms of different weights and measuring systems for different countries. The Internet and most offices are filled with charts and calculators that will automatically convert from metric to imperial and back again. There’s a very complete and easy-to-use one available at http://www.onlineconversion.com/.

            Many of us can even do simple conversions in our heads, and come up with rough equivalencies that will often give us an answer we can work with. A meter is about 1 yard. There are about 2 ½ centimeters to the inch. There are approximately 6.2 kilometers in a mile.

            When it gets really complicated is when we have to make sure that the people we are dealing with know that we are—or they should be--translating into or out of the metric system U.S. imperial units, or British imperial units.

            Even when were are dealing with people who are “currently” using the same weights and measuring system that we are, we may be dealing with old figure dating back to before they converted.

            In the same way you will have problems comparing apples and oranges, you can have problems comparing metric tons, long tons, and short tons; pounds, stones, and kilograms; U.S. gallons, U.K. gallons, and liters. For that matter, are we sure that the people we are dealing with know what currency we are dealing with?

            We have to make sure that they do.

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7. Math Basics

            For those of us who deal with numbers on a daily basis, this is all fairly simple and natural. We cannot afford to lose track of the fact that many people require a calculator to balance their checkbook. Many need a calculator to do simple addition and subtraction.

            If numbers are to have any meaning or significance, we have to show the people we are dealing with where they came from, what we did with them, and why, and what the answers actually mean.

            Sometime we have to remind our audiences of the basics.

            When numbers were first developed many millennia ago, they were used to count things: one goat, two cows, three spears, and so on. They are still used that way: one multinational organization, 200 offices, 3,456 employees, and so on.

            The next logical development was addition and subtraction. Add three more goats, 12 spears, and five offices, then subtract one cow and 47 employees.

            As we all know, multiplication and division are just systematic ways to add and subtract.

            The next most common types of numbers we use are fractions and decimals, which are two different ways of expressing the same thing; ½ is the same as 0.50, ¼ is the same as 0.25, and 3/8 is the same as 0.375.

            We know what they mean and how we got them. We just have to make sure that our readers and listeners do too.

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8. Math Basics (Fractions, Decimals, and Percentages)

The next most common types of numbers we use are fractions and decimals, which are two different ways of expressing the same thing; 1/2 is the same thing as 0.50, 1/4 is the same as 0.25, and 3/8 is the same as 0.375. We will look at percentages a little later.

            As we all remember, to convert a fraction into decimals divide the top number, the numerator, by the bottom number, the denominator. The “ /” in the fraction means “divided by.”

So to get the decimal equivalent of 2/5 it would be 2 (the numerator) / (divided by) 5 (the denominator), or 0.40.

            To convert a decimal into a fraction, treat the decimal as the numerator and put over the denominator of 100. Thus 0.75 is 75/100. We the “simplify” the fraction by dividing both the numerator and the denominator by the same number. In this case 25 goes into both three times and into the denominator four times which simplifies it to 3/4. Whatever number you choose to use to simplify a fraction must go into both the numerator and the denominator equally, with nothing leftover.

            To express a decimal as a percentage, remove the “ .” and add a % sign. That means 0.50 can also be expressed as 50%. While 0.5 and 0.50 are the same 5% and 50% are not. Make sure you have the proper number of zeroes.

            To convert a fraction to a percentage you first convert it to a decimal. 1/8 becomes 0.125 (which is 1 divided by 8). While a decimal can have as many digits as necessary, a percentage cannot. It cannot be greater than 100%. That means 0.125 would convert into 12.5%.

9. Basic Math (Mean, Median, and Mode)

            We can all get tripped up at times when talking about—or trying to explain—the mean, the median, or the mode.

1. Mean: The mean is the arithmetic average. Add up all the number you are dealing with and divide them by the number of numbers you have. If you have 25 test scores add up all 25. Let’s say they come out to 1,800 points. Now divide them by 25 and you will get a mean score or 72. 
2. Median: The median is the midpoint in a series of the numbers. Let’s take our 25 test scores and list them, from best to worst; from 52 all the way up to the one student who scored a perfect 100. The one in the middle—the 13^th—is our median. In this case it’s 78. That’s fine when you are dealing with an odd number of test scores. What do you do when you are dealing with an even number. If there were 24 test scores you would take the two in the middle—numbers 12 and 13. In this case they would be 74 and 78. You would add them together and divide the answer by two (77+78=155÷2=77.5) and come up with a median of 77.5. What that would mean in this case is that more than half the class scored better than the average. In this case 15 of 15 students scored better than 72, the average.
3. Mode: The mode is the most common number in a series. Let’s say you list all the scores and look at the ones that repeat the most often. In this case three students scored a 74 while four students scored an 80. Then 80 is the mode. If every number appears only once, there would be no mode. If several numbers appear the same number of times, they are all modes.

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10. Why We Don’t Trust Numbers: A Case Study

            Is red meat bad for you? Or is it good for you? What about butter? Salt? It all depends on which study and statistics you read—and choose to believe.

            There are more contradictory studies being released to the press today than ever before in history. And each and every one of them is based on “numbers.” They are on any subject you can name; food, health, sex, project/programme purpose, the stock market, etc.

            As a result, the public is getting more and more confused—and more and more fed up with scientific or statistical information—ALL scientific and statistical information.

            Preston Mercer, of the University of Kentucky’s College of Human Environmental Sciences says that the problem with all the different and contradictory studies and “scientific findings” that we keep reading about is that too many of them come from “people with agendas other than presenting sound science."

            In terms of food, over the years we have all read that butter is bad and/or good for you, as is margarine, salt, wine, and virtually everything else we put into our mouths. The experience of contradictory food studies has taught Mercer a major lesson: “There are no foods you shouldn't eat. For normal, healthy people, there are no good foods and no bad foods. Eat a wide variety of foods and maintain a healthy weight.”

            He also urges scientists to be more careful with the number and survey they release, and with how they interpret them.

            The same applies to project/programme purpose.

Assignments

 

Multiple Choice (2)

 

1.         When the vast majority of people have to spend too much time trying to deal with       or understand numbers, __________.

a.       They get very good at it.

b.      The numbers become confusing and meaningless.

c.       They are better at spotting mistakes.

d.      None of the above

 

2.         Math helps us all with __________.

a.       The reports that we generate and have to deal with.

b.      Income and expenses.

c.       Profit and loss statements.

d.      All of the above

 

3.         Many mistakes in math happen because __________.

a.       The people doing the work are not skilled.

b.      People assume the calculations are being done correctly.

c.       Mistakes don’t usually happen

d.      None of the above

 

4.         When numbers were first developed many millennia ago, they were used to ____.

a.       Keep track of expenses.

b.      Barter and trade.

c.       Count things.

d.      All of the above