Betsy DeVos, Bill Gates, Borat, Dick Smith, Facebook, Google, Harvard Business Review, HBR, Kazakhstan, Mike Moore, Nate Silver, OECD, Ricahrd Branson, Steve Jobs, Trump
A few things have happened recently that have had me look again at numbers and as usual I shall try to pull the threads together. While our near neighbours New Zealand might be reeling from their seismic events of late (7.6 on the Richster Scale), a less dramatic but no less significant event has happened in Australia in the last week or so. The much-vaunted Australian education system took a further hit with the announcement of the OECD education rankings which showed for mathematics we are now behind the nation glorious of Kazakhstan (of Borat fame). Sobering news indeed.
Then there was the spectre of the Trump election and the appointment of Betsy DeVos (just one ‘S’ from being a quirky 1970s art rock band). Part of the Amway family by marriage it’s pretty certain she will know how to do numbers so perhaps math in the US education system will get some heft. In fact it’s looking like the Trump Cabinet will be pretty well endowed numbers-wise. According to NBC News net worth of $14.5B between them. The Australian national debt only sits $44.5b by comparison.
Under DeVos there will certainly be lots of math tutoring vouchers available that’s for sure. And the US needs to be up the rankings as well because it, too, falls beneath Kazakhstan AND Australia. Strange that, given when it comes to R&D and real smarts, the US seems to out-rank just about every other nation (Israel aside). Perhaps the quality of school-based education doesn’t count for too much after all? Maybe it’s our University sector that’s all-important? But oh yes we are dropping in those stakes as well (refer previous blogs).
Reflecting on the US Presidential race at a safe distance now, I, and am sure a lot of pundits, are trying to work out what went wrong with the predictions. Nate Silver, the guru amongst pollsters, got it completely wrong. Pollsters got Brexit wrong and even though they were armed with that aberration they still somehow crunched their US pre-polling numbers incorrectly. So when we are told to focus on the numbers and cast aside feelings and impressions we find that the numbers don’t really yield the right answers. In fact the pundit who seemed to predict the election result most accurately did it on ‘gut instinct’ and that was Mike Moore. If you read his website you will see that his assessment based on grass roots discussions was eminently more accurate than Silver’s.
We are constantly reminded of the presence of big data and I think few of us understand what it is, other than it involves data and it is ..err big! I wonder sometimes whether the glib reference to this is because the data isn’t that big, or that special? Take analytics. The intelligence that sits behind our social media presence and our buying behaviour is now highly sought after with mainstream retailers paying lots for a more acute analysis of our expenditure patterns. Facebook and Google charge huge amounts (cumulatively that is) for Adwords etc. to promote your website and your brand/presence. I’ve done a lot of this and I cannot say that it has been that successful. Apparently the backend of these social media platforms can, with great precision, reach a highly targeted market. What if the models being used were as accurate as Nate Silver’s big data analysis?
When it comes to feelings and hunches the business world stands aghast. We are meant to use data, increasingly available in larger volumes thanks to super-computing, to make decision. Managers are taught to be all knowing scrutineers of numbers. Stock market analysts are great runners of the numbers and yet they seem to, time and again, fail to spot the complete dog that goes down the toilet – your money with it. Take Dick Smith. That turd was finely polished and the analysts got it sold to even the reasonably sophisticated investor and yet if you ever shopped in one of their stores you would immediately call your broker shortly thereafter and relinquish your holding. I can think of no clearer case of going with your gut and avoiding the numbers.
The latest November edition of the Harvard Business Review ranked the world’s top 100 CEOs. The top three Martin Sorrell, Lars Rebien Sorenmson and Pablo Isla were interviewed in depth. What they said may surprise you. Isla, CEO of Inditex, is one of the world’s largest fashion retailers where one would suppose sales data and customer buying behaviours would be the absolute touchstone of the company. Rather he says ‘I’m gradually learning to be less rational and more emotional.’ He’s not alone. Entrepreneurs like Steve Jobs, Bill Gates, Richard Branson all placed or place a lot of emphasis on the ‘hunch’. For them it would appear that the gut instinct is more of a business guide than a complex data set.
So next time someone has done the numbers, be it a TV pundit, a politician or a business consultant be very wary. What does your ‘gut’ tell you? Don’t be misled by the whole ‘post-truth’ shtick that’s oscillating around at the moment. Perhaps the lack of respect certain sectors of the population have for ‘experts’ stems not from their lack of understanding of numbers, or the scientific method, or even from a ‘chip-on-the-shoulder’ reaction to a burgeoning well-educated demographic but a lived experience where the numbers don’t quite stack up on many occasions. For example the economy has been growing, employment has been improving but their standards of living have declined.
So next time you are confronted with a league table, like our ‘dive’ in the math sweep stakes, it might be worth asking what method was used to determine the relative positions, what sample size was used, how was validity and reliability achieved and what vested interests existed for some counties to ‘fluff’ the figures? We might not be as bad as we are told. Go figure!