If like us, you too make a living by thinking about numbers, contextualising them and then explaining them to others then you should consider reading this book ‘Making Numbers Count: The Art and Science of Communicating Numbers’ by Chip Heath & Karla Starr. The book explains that there is a right way and a wrong way to explain numbers to other. Let’s start by showing you the WRONG way to explain numbers to the public: “When Alfred Taubman was chief executive of the restaurant chain A&W, he came up with a clever way of challenging the competition: He offered a third-pound burger for the cost of a McDonald’s quarter-pounder. The result? More than half of A&W’s customers seethed, convinced that they were being asked to pay the same amount for what sounded to them like a smaller burger.”

Now, let’s go through an example of the right way to communicate numbers. Suppose you have been tasked with explaining benchmarking to your stakeholders. You could explain in mindnumbing detail the benchmarking process but by the end of your presentation everyone would be asleep. Or you could use the following analogy: “The extreme precision of Six Sigma manufacturing could be represented by a baker who prepares two dozen cookies flawlessly every night for 37 years.”

Let’s move to a weightier cause. Suppose you passionately believe that global warming is the most important crisis facing the planet. You could rave and rant at home greedy companies and captured politicians are letting us down. Or you could use the following analogy: “Consider how we might describe the world’s water: 97.5% is salinated; the other 2.5% is fresh water, but 99% of that amount is trapped in glaciers, leaving only a small fraction that is actually drinkable. If you want people to “see and feel the numbers, not just read them,” Mr. Heath and Ms. Starr say, consider a visual analogy: Imagine “a gallon jug filled with water with three ice cubes next to it.” The jug represents the earth’s salt water, the ice cubes the glaciers, and “the drops melting off each”—that’s what’s available for consumption.”

This short book (135 pages) explains the different times of psychological challenges people face in understanding numbers and how you and I can use clever analogies and stories to present numbers in a hard hitting way.

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Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.

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