The Green Tie – The Official Blog of NAEM

Emerging Leaders Series: Numbers Talk. But what are they saying?

January 4, 2012 at 10:07 am 1 comment

It turns out that how you present a number is often as important as what that number actually is.  Executives and investors tend to focus on numbers because they are quantitative, readily-comparable and solid.  Or are they?

A given piece of information, such as the amount of energy a new light bulb uses, can be presented in a variety of ways.  For example, it can be stated as watts-per-bulb, dollars-per-year, kilowatts-hours saved compared to the old bulb, net present value, or lifetime costs, to name a few.  Each measurement brings to mind different considerations and highlights different comparisons.  This can sway the reaction of the audience.

Rick Larrick, a professor of management at Duke University’s Fuqua School of Business, studies how a single piece of information can garner multiple responses, depending on how it is presented.  After attending one of his lectures, I read a paper he wrote with Jack Soll.  They found that people respond differently to MPG and GPM (gallons per hundred miles), even though the two ratios nominally convey the same information.

People tend to favor switching from a 30-mpg car to a 40-mpg car over switching from an 8-mpg car to a 10-mpg car.  The first option seems to be a better deal.  However, assuming the distance you travel remains constant, you actually save more gas (and therefore more money) with the second option.

In GPM terms, the first option involves going from 3.3-gpm to 2.5-gpm, while the second option involves going from 12.5-gpm to 10-gpm.  Obviously, saving 2.5 gallons per hundred miles is better than saving less than one gallon.

This is why the new labels for cars require GPM as well as MPG.  By presenting the information this way, people are encouraged to minimize their need for fuel.  The facts don’t change, but policy and policy goals affect how the facts are presented, which demonstrably impacts how people react to the information. Here’s a quick example, expressed in numbers:

First Option	Second Option
30 mpg  >  40 mpg (3.3 gpm  >  2.5 gpm)	8 mpg  >  10 mpg (12.5 gpm  >  10 gpm)

Though it may seem that choosing to present facts in a certain way, such as GPM instead of MPG, is a form of manipulation, consider the fact that each choice is a manipulation.  Every time you present a number, you are making decisions: which units to use, what to compare it to, what scale to use — and, of course, what to measure in the first place.

In business, numbers are presented all the time.  The health of a company is often represented by a single number, as is the measure of sustainability.  The context in which you place a number can emphasize certain things and downplay others – in fact, it always does, whether we intend it to or not.

Are your numbers saying what you want them to?  What tactics do you use to convey important numbers?

Kimberly Wallis is a graduate student in environmental management at the Nicholas School of the Environment at Duke University, where she focuses on energy issues and effective communication. She is particularly interested in how individuals and organizations change.

Entry filed under: EHS Skills, Emerging Leaders Series, Sustainability, Uncategorized. Tags: communicating environmental concepts, corporate EHS management, effective communication, EHS Management, EHS Skills, energy policy, Environment health and safety management, environmental communications, environmental policy, sustainability management.