Posts Tagged 'Statto fever'



Faint traces of buttock

In September 2009 The Times Bugle podcast described an apology by the former CEOs of bailed-out banks in front of a UK parliamentary committee as “not so much half-arsed, as containing barely detectable traces of buttock.

As the CEOs of the large US banks appear in front of their senior politicians to admit to as little as possible – while approving billions in bonuses from trading in a market created and supported almost entirely by central banks – it’s worth having a bit of a buttock rummage in the press to see what’s motivating our CEOs to do good.

What are we writing about corporate social responsibility these days? After all, when money’s tight, it’s a pretty obvious thing to cut back if money is more important than ethics.

On first look, there’s good news in the press coverage of CSR. The consistent rise in the number of stories about it since 2002 has continued. There are about four times as many articles about CSR now as there were in 2002, which suggests that interest hasn’t gone away:

What are these stories about? Business ethics in general have been in the news quite a bit in 2009, yet the number of stories that mentioned CSR alongside ethics or ethical behaviour, and didn’t talk about profit, dropped off suddenly:

Still, doesn’t look too bad; the long-term trend is slightly upward. And this is a rough measure: it would not capture a story about how ethics are more important than profit, for example.

Now if we look at the similar graph for CSR stories that mention profitability but not ethical behaviour, we see the opposite effect in 2009: a sudden jump.

Note the scales were different; so to see what’s really going on, let’s overlay the two trends:

Gosh! Our search is not perfect, but in 2002 there were the almost the same number of ethics-not-profit stories as profit-not-ethics stories. Since then the number of ethics-based CSR stories hasn’t really shifted, and is now declining. But look at the coverage for CSR-as-profit! That’s really taking off.

A couple of possible explanations: maybe the only way to protect a CSR programme right now is to convince shareholders and CEOs that it is all about making pots of money. Or maybe we’re all just writing stories about balance sheets now, and find business ethics a bit irrelevant.

In the banking industry in the last 12 months – a sector that has been accused both of being ethically-challenged and far too motivated by profit – there have been 82 stories on CSR that mention ethical behaviour, but not profit. There have been 548 (six times as many) CSR stories that mention profit, but not ethical behaviour.

You might think that business, and especially the financial sector, has often been half-arsed about its social responsibility. If so, these graphs seem to suggest (in Bugle terms) that the press coverage of those responsibilities shows increasingly faint traces of buttock.

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All together now

I’m in the middle of writing a book about the epic fails of capitalism (a project that’s got much bigger in the last 12 months), and in the part of the book that deals with mergers – a rich source of epic failure – there’s one that stands head and shoulders above the rest: AOL and Time Warner.

When we were doing the research into the press coverage of the merger, one thing stands out: the number of reporters who faithfully wrote down that the two businesses would capitalise on their synergies, without really asking what those synergies might actually, you know, be.

Synergy is a weasel word for making people redundant and selling the buildings that they worked in, and also a vague placeholder for we want some of their stuff to make our stuff work better. In the first case, using it avoids awkward words like redundancy that make people glum, and in the second, it avoids actually telling us what they are going to do.

It’s now pretty clear that AOL-Time Warner needed a lot of the first type of synergy, because there was bugger all of the second type.

I went back to the Factiva database to see whether there are more businesses claiming synergy these days, and there are, big time. I searched in the European and North American business press, and compared the number of articles mentioning mergers with the number mentioning mergers and synergies too. M&A volumes may be at their lowest for five years but the synergy bubble never bursts. Mentions of synergy are 402 per cent up in the last 30 years, and the rise has been wonderfully consistent:

In just over 30 years it has become five times as likely that a business will describe a merger as providing synergies (or, at least, that this lazy rebranding will be reported in the press).

It might just be that synergy has just become a vogue word. But I think it’s also due to positive word bias, which is far more of a problem.

To explain: every M&A deal has some rationale beyond a pooling of capital and saving on letterheads. The benefits can be difficult to explain, easy to question, or impossible to measure accurately. Three reasons not to go into too much detail if you want to push it through quickly – especially if you’re directly or indirectly incentivised to make the merger work. If you want to create momentum in the media or among shareholders and employees (and in your own mind) it helps to give the benefits a positive-sounding, catchy, go-for-it name.

That name is synergy: code for the things we don’t really want to talk about right now. It won’t make your merger work any better, but it might make more people believe that it will. And if your reward comes more from the deal than the messy aftermath, it pays to talk about synergy.

Worse than nothing

reliabilityFor a feature I’ve just written for Research Magazine I’ve just been chatting to David Spiegelhalter, Professor of the Public Understanding of Risk at the University of Cambridge about how we present statistics. He admits he shouts at the TV when they use statistics that scare or confuse you without helping you.

There are plenty of stats that use percentages or relative likelihoods to compare stuff (before versus after, or this versus that), without really giving us a clue. An example: if you drive 10 miles to by a lottery ticket, you are between 3 and 20 times more likely to die in a car wreck than win the lottery.

The answer to this is not, as my mum pointed out, that you can buy lottery tickets online these days. Comparing the risk of driving (from which, every time you don’t die, you usually get a benefit) and the reward for buying a lottery ticket is like comparing a gun with a gnu because they use the same letters.

The professor would rather we stuck to presenting statistics, where possible, as what would happen to a set of people (10, 100, or for rare events, 1000): for example, according to the Office for National Statistics, for every 1000 people who died in 2008 around 330 died from circulatory (heart) disease – and only five in transport accidents. This might imply that overweight gamblers might be better off walking to buy a lottery ticket than driving. Unless you really, really like living dangerously.

I don’t understand why magazines and newspapers – and marketing departments and think tanks – don’t have a house style on how statistics are presented – for example, insiting that spokespeople qualify “up by 20 per cent” statements with what the expected outcome would be in terms of death, or Euros, or gnus (plus a confidence limit). Newspaper style books have pages about the correct title for a judge and whether you can use aggravate as a synonym for irritate, but I’ve never seen one with instructions on comparative statistics. Maybe it’s because the people who compile style guides know a lot about the meaning of words, but less about the meaning of numbers.

It’s not as if the “for every X people” stat isn’t visual enough. For example, I can give you the interesting (and true) statistic that for every 10 people who come to Talk Normal from a search engine, two have searched for either naked or naked people:

Two from ten

Try this article from Joanna Blythman in The Herald called Scientists must not dictate on public health matters (better leave that job, it seems, to Joanna Blythman). While complaining about Professor David Nutt, she tells us that scientists think their knowledge

is superior to other types of knowledge we might bring to bear on our decisions, such as intuition, experience, observation, or even common sense.

Even when they have used all four, plus scientific method too. She’s a skilled polemicist:

The huffing and puffing of Nutt and his indignant allies has obscured the fact that whatever the rest of society thinks or knows about cannabis…

Note: thinks or knows. As in, if Joanna Blythman thinks something, and has used intuition etc, then she knows it, so it must be better than anything a scientist has boiled up in a laboratory. Especially if she agrees with you.

It doesn’t stop her throwing around a few stats at the end to make her point that the only scientists who know about statistics are the ones who produce statistics she likes. For example:

Now we learn, once again from bona fide scientific research, that pregnant women taking folic acid supplements are up to 30% more likely to produce babies with asthma. Yet still the folic acid lobby is arguing that we should press on regardless with blanket fortification of bread and continue to advocate supplements during pregnancy…

And that, ladies and gentlemen, is how to use statistics to confuse people. Quite apart from the fact that she neglects to point out that the research isn’t from a random sample and shows a weak correlation, that a lack of folic acid causes spina bifida and other problems, we don’t have a chart that shows the effect of this up to 30% as an outcome for 1000 babies born today. We can’t draw one, because so far this research doesn’t tell us enough with enough certainty. On the other hand, we know a lot about the damage caused to babies by poor nutrition during pregnancy.

One of the problems with the presentation of statistics in the press is that you can always slice the results to be more dramatic then they really are, and that suits a speak-your-branes columnist like Blythman. Even journalists who don’t know much about numbers know how to do this. And so I can’t help thinking that in-house standards for newspapers on how they present statistics about are far more important than pages of rules on how to refer to the wife of a marquess or an earl*.

* marchioness and countess, respectively. Pointless as it is, the second one’s good for pub quizzes.


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