Leadership hack 012 – precision is not accuracy
No matter what the question is, getting a number as an answer is soothing. Logic suggests that in order to have arrived at a number, someone must have done a calculation. Numbers are clear, numbers are facts.
However, while numbers can be very precise (e.g., 67,600), this does not mean that they are accurate. Anyone could have made any calculation to come up with a number. For example, you could have estimated that your product will have a market penetration of 40% in a customer segment of ~169,000 people. This calculation is made up of many assumptions, and it is attempting to forecast the future. However, these uncertainties are not reflected in a number that is shown to four decimal places.
So how can we make sure that uncertainty more clearly? There are several possible options.
- Ask for a range and not exact figure, for example, 65-75%
- Request a confidence interval, for example, 67% +- 5%
- Make sure figures are caveated the figure, for example, ~67%
While each of these has its merits, humans get fixated on specific numbers. I have found the best option is to give or request a range. While this will make you uncomfortable, it means you have a better appreciation of the uncertainty. Then when you present figures to your leadership, you communicate the uncertainty and you cannot be held to ransom against and exact number.