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MBA Essentials
JUN 4, 2019

3 Tips to Communicate Numbers Effectively

By Masaru Hoshino

Does crunching numbers give you nightmares? It doesn’t have to. In fact, any good quantitative analysis can be broken down into three simple requirements:
  1. Clarity of quantitative information
  2. Valid assumptions
  3. Awareness of hidden information

The goal of this article is not to improve your analytical skills, but rather to help you accurately communicate numbers in the proper context. Follow these tips to clear up that kind of language and become a better communicator with numbers

Tip #1: Change Adverbs into Numbers

Imagine you need to report some poor customer reviews to your boss. There are many people who would simply say, “We have gotten many complaints.” However, this does not convey a sense of size or scale. How often do these complaints occur? What is the rate of increase or decrease? By “many,” are we talking 10 or 100?

The first step in communicating quantitatively is to replace vague adverbs such as “fairly” and “quite” with actual numbers. Saying there has been “an average of three claims per day in the past month” clarifies the complaint situation immensely. Likewise, don’t tell your boss that “sales are increasing a lot”; tell him that “compared to last year, sales are up by 20% this quarter.”

Benefit: The sense of scale is clarified.

Drawback: An excess of numerical information can make a situation overly complicated. To avoid this, compare movements (month-to-month or year-to-year trends), differences (comparisons of items), or percentages to grasp size or scale.

Tip #2: Clarify Unstated Assumptions

Imagine that, during a negotiation, you perform a cost evaluation and then inform your client that your service will cost ¥1,000,000. The client responds that this is high, as they were told that there would be a 25% discount. It seems there has been a lack of clear communicationーthat the parties involved have different assumptions regarding the budget and how the discount would apply.

These are the kinds of assumptions that need to be clarified sooner, rather than later. Supplying accurate information and confirming assumptions are effective ways of making sure that you are on the same page as the people you are doing business with.

Benefit: Information is communicated more accurately.

Tip #3: Visualize

Let’s think about averages. Say that your company is stating its repeat order rate, which is 65%, as compared to the industry average of 70%. Now, 5% may not seem like a significant lag. However, put these numbers in the proper context, and you may see a very different picture.

Let’s plot this data on a distribution map, as above. If the plot shows a gentle slope with the vertex at 70% (right graph), then 65% may be within the average range. However, if it is a tight distribution (left graph), then 65% may be among the lowest averages in the industry.

The same 65% could imply completely different things.

Therefore, when dealing with vague numerical entities like averages, it is important to use visual tools to express variations, such as standard deviance. Graphs and distribution charts are an easy and effective way to convey the significance of numbers.

Benefit: The situation hidden behind the numbers is clarified.

While numbers do have a certain eloquence about themーnot to mention a power to convey crucial informationーthey can also be mysterious, unless put in the right context and explained in the right manner. Follow these tips, and you should be able to do just that!