Numbers Vs Words – understanding differently!

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Numbers Vs Words – understanding differently! 140, 01 Dec 2024

Sometimes we play Sudoku and Wordle. But mostly, we prefer one over the other. This preference is a marker for how we subconsciously understand management, via numbers or words. Intrigued? Do read on.

I am in awe of people who approach management through numbers, who can easily crunch them to tell how well a business is doing, or what its challenges are, by simply looking at a P&L statement and Balance sheet. On the other hand, people like me, who manage through words, need immersive experiences, site visits, discussion with employees and customers, etc. to arrive at the same conclusion. Both approaches have their respective advantages, though.

Numbers can tell us the “WHAT” – how the performance has changed, factors impacting it, and – to a limited extent – estimate performance in the near future. Numbers are a report card of verified information. But numbers are essentially lagging indicators, they follow events. Number based approach is conservative. Here we first verify and then trust.

Words can tell us the “WHY” – why the performance turned out as it did, and what needs to be done to improve or correct it in future. Words are like a brochure of events and prospects, some of which are still promises. But words are definitely leading indicators, they precede events. Word based approach takes chances looking ahead. Here we first trust and then verify later.

All of us do both, but our default approach and comfort zone could be the one or the other. So how do we navigate through our natural tendencies and make the best of both numbers and words? A few thoughts from my experience:

a. First, we must understand our own natural tendency – are we eager to open an excel file or do we open it with a sigh? Do we enjoy reading descriptive documents or presentations or do we struggle with them and give up half-way? Once we know our own natural tendency, we can analyse and understand the pros and cons of both approaches to management

b. For a person who is inclined to words, the pros are clearly its forward-looking nature and big-picture clarity (the WHY) but the cons are clearly lack of explicit understanding of the current situation. So, it is important to buckle down and learn to crunch some of the critical numbers to bring about a balanced approach, words-led but number-backed.

c. For a person who is inclined to numbers, the pros are clearly its excellent grasp of facts, and explicit understanding of the situation (the WHAT). The cons are that reasons behind the numbers, and future opportunities may not get enough attention. So, it is important to read key documents, to get a better sense of context and direction, numbers-led but words-directed.

To summarise, all of us are essentially inclined towards a numbers-led or words-led approach to management. The key is to understand ourselves first, and work through the pros and cons of each approach, in evolving our own approach. Together with numbers and words, we can build a whole picture, that will provide clarity and direction to all our colleagues.

I hope you enjoyed reading this one, and – as always – I look forward to your feedback, and to hearing your own experiences around this topic.   

Warmest regards, Krishnakumar.

Image courtesy:

Unknown, random internet search.

Reference Sources:

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