“Nobody ever made a decision because of a number. They need a story.” — Daniel Kahneman
Metrics are incredibly useful, and we’ve got more of them than ever. Sometimes they’re internal metrics that the business puts on a dashboard somewhere. Other times they’re from outside the business – anything from the results of quantitative consumer research to economic data.
So we often know that we had 1,297 visitors to the website last week, or that sales are up 61%, or that 59.4% of consumers preferred design A to design B, or that CPI inflation is 6.1% year-on-year.
I worked for years with a brilliant FD called Bill, who was brilliant at asking the one question that you need to ask when confronted with numbers like these: “So what?” In other words, what will we do differently as a result of knowing this information? Numbers are only useful in so far as they support action.
Answering that “so what?” question involves turning the number into a narrative, a story about its significance and its effect on your future plans. Sales are up, but we expect it to be temporary; it’s the result of demand being pulled forward; we shouldn’t scale up our cost base in response. 59.4% of consumers preferred design A, but we worry that it’s too big a change from our current designs so we should really explore alienation too. Inflation is up 6.1% year-on-year, but we don’t think we can sustain a price increase so we really need to focus on input costs and consider taking a margin hit.
Narratives are the glue between a number and an action. Humans are storytelling creatures, not robots. If your job is to report on metrics, find the way to thread them into a broader narrative that explains what’s going on. And have that voice of Bill in the back of your mind, always asking “so what?”