Monday, November 12, 2012

By the numbers

"In the end, it should always come down to the maths."  That was the wisdom of my sixth grade teacher, Mr. Balsam, who spoke about mathematics the way the Brits do -- calling it maths instead of math.  (He taught there for a couple of years in the 60's, before coming back to the colonies.)

The point he was making is that a facility with numbers is essential to proper decision making, by providing an orderly and logical underpinning for sifting through the information that bombards us.

So, I am sure that Mr. B was pleased that math was one of big winners in last week's election, according to Smithsonian Magazine's Smart News blog:
"New Yorker reporter Ryan Lizza said this morning that after months of campaigning, the result of the 2012 election “was a huge victory yesterday for math.” Wired called 2012 “the nerdiest election in the history of the American Republic.”'
How many times does a comic referencing math go viral?  This one from the online comic site XKCD, did (it was mentioned in the above story):

As someone who is "right-brained," math did come easy to me.  But Mr. Balsam was spot-on: the ability to crunch the numbers is essential to avoiding foolish errors caused by our all-too-human tendency to take mental shortcuts.

Example:  A bat and ball cost a dollar and ten cents.  The bat costs one dollar more than the ball.  How much does the bat cost?  Get it right?  Thought so.

A recent conversation I had with the owner of a commercial services business turned to the bottom line:  he was seeking to increase his profits and had concluded that investing in a new marketing campaign to acquire new customers was his best path to that outcome.  As we stepped through the numbers (and his logic), it became clear that the easier, less costly and far more profitable path was to focus on selling more to his existing customers.  The "maths" helped unmask an erroneous strategy.

For business owners "the numbers" can be comforting or tyrannical.  It can take years of experience to understand which numbers are important in gauging a business' progress and which are merely noise.  It is not always obvious, or intuitive.

So, sharpen your pencils.  Examine your assumptions.  Do the math.  Eventually, it will add up.

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