Numbers are powerful decision-making tools, but they can lead your company to abandon core principles and tell the wrong story.
The NBA stories that mean the most to me center around the obvious greats: Michael Jordan, LeBron James, Kareem Abdul-Jabbar, Julius Erving, and Vernon Maxwell.
In a piece for The Players’ Tribune, Allen Iverson opens up about many personal topics, one of which, the idea of building modern NBA super teams, got him complaining about how too many NBA personnel think they can just crunch some numbers, run a few simulations, and that will lead to the optimal roster.
Enter two-time NBA champion Vernon Maxwell.
During the 2000-01 NBA season (Iverson’s lone MVP campaign), Maxwell – or, as Iverson affectionately calls him, ‘my main man Vern’ – was traded to the Dallas Mavericks. In the Sixers’ defense, Maxwell was a mere shell of his former self, playing through what would be his final NBA season, but Iverson wanted nothing to do with the argument that the numbers could correctly decide whether or not it was in the team’s best interest to retain Maxwell.
About this particular roster calculation, Iverson writes, ‘can these geniuses find the stat about how Vern’s tough as NAILS?? Or about how the guy had our back, every night, no matter what??’
Iverson is right. While basketball statisticians have numbers to measure shooting percentages, quality of shot selection, player efficiency, and plenty more (and they had far fewer of these measurements during the time of the Maxwell trade), how do you measure toughness? How do you measure a player’s ability to stand up for his teammates?
The answer is that you see those qualities. You feel them. They are qualitative measurements based on intuition, not quantitative measurements from which you can say something like, ‘Vernon Maxwell has a 19.6/20 rating when it comes to backing up any given player on our team on any given night.’
Iverson then delivers the heart and soul of his argument against making decisions based upon numeric calculations:
‘Not everything has to be measured – and not everything was meant to be! That goes for hoop, or life, or whatever. Can’t wrap your brain around the whole damn universe.
‘Some sh*t, the way things work, it’s just a mystery on purpose.’
I can’t agree more. You can measure a lot, and much of the time it’s smart to make decisions based off those measurements, but sometimes it’s not. Sometimes, even when the numbers are telling an important truth, they’re not the most important part of the story.
Which brings us to an American car company.
On November 26, General Motors announced that it would be closing five North American plants, four of those being American plants in the states of Ohio, Michigan, and Maryland. According to The New York Times, this cost-cutting plan will result in the loss of about 14,000 jobs.
That’s a lot of people out of work. So why is General Motors doing this?
According to Cincinnati.com, ‘GM spokesman Pat Morrissey told The Enquirer that the company made its decision based on market conditions and customer preferences.’
Sales of smaller cars, such as GM’s Chevy Impala, have been in decline, with recent consumer trends pointing to a healthier demand for trucks and SUVs. Those same recent trends also reveal slight declines in both new car purchases and purchases made by individuals (as opposed to fleet-oriented purchases, such as by rental-car companies).
On top of that, GM wants to pursue a future of autonomous (i.e. self-driven) cars and electric vehicles. The sad and simple truth is that the closing plants are only equipped to produce the smaller sized vehicles that GM intends to slash from its offerings, and updating the plants is too expensive.
The biggest number, though, is the projected profits. According to USA Today, GM’s moves are projected to, ‘deliver more than $6 billion in additional annual cash flow by the end of 2020 … That includes $4 billion in cost cuts and $1.5 billion in reduced capital expenditures.’
To put it mildly, $6 billion is a big number, and one that would entice most any business executive, but don’t forget that other large number: 14,000 jobs lost.
Granted, some of these workers will receive jobs at other plants, but that still means they have to move. They have to uproot the lives they’ve worked hard to establish. While the projected profits and environmentally-focused talk about the future of automobiles sounds all good and well, there’s a very real, very human side to this that’s near impossible to quantify. That side is the amount of hardship, emotional as well as physical for those forced to relocate, that will be endured by each and every person affected by these layoffs.
Even if everything goes according to plan, GM’s brand story is taking a major hit. Although, this may be a case of GM desiring to pivot to a different story.
As recently as 2017, GM’s mission statement was, ‘to earn customers for life by building brands that inspire passion and loyalty through not only breakthrough technologies but also by serving and improving the communities in which we live and work around the world.’
How does this move serve and improve the communities in which GM lives and works? They are cutting 10% of their workforce in pursuit of a statement on their website that is a more accurate portrayal of their mission:
‘We are General Motors. We transformed how the world moved through the last century. And we’re determined to do it again as we redefine mobility to serve our customers and shareholders and solve societal challenges.’
I’m all for revolutionizing the automobile industry, especially in terms of clean fuel solutions, but the above statement, while it includes customers and shareholders, fails to mention a responsibility to serve GM employees and communities.
However, in light of the recent plant closures, at least that GM statement is a truthful story.
But should it be the story they want to tell?
The fact that lawmakers on both sides are infuriated about the closures should say it all. Ohio Democratic Senator Sherrod Brown has spoken loud and clear about his disapproval of GM’s actions, citing unfortunate pieces of last year’s GOP tax bill as wrongly incentivizing the closures in favor of cheaper facilities abroad.
Republican Donald Trump, a key orchestrator of that tax bill who, according to Sen. Brown, was unaware of the overseas loophole that has helped incentivize this move by GM, blasted the company for its actions after having received so much aid from the government over recent years.
To be specific, according to the aforementioned Cincinnati.com story, ‘To date, GM received $14.2 million in credits to apply to taxes for making jobs and $46.1 million for retaining jobs.’
Additionally, ‘GM received grants to purchase equipment and train employees.’
Isn’t that a nice story, GM? Willing to receive help, but unwilling to bite the bullet in order to return the favor.
Needless to say, few, if any, are out there raving about the awesomeness of GM. In the future, the company might regain some goodwill among the general public, but right now a foundational American company has decided to cut thousands of American jobs while abandoning several American communities because numbers told them it was in their best interest.
Maybe GM is right to do this, but there were other options, such as updating the plants to be capable of building the larger, more desired vehicles. Sure, that’s the more expensive route, but it tells a better story. That speaks to GM’s commitment to American jobs and their workforce more than the story that’s playing out, which speaks more to their love of the bottom line than anything else.
From sports to business to the entertainment industry, there are countless examples of numbers being used first, while qualitative measures, such as intuition, are shoved to the back burner. Sometimes, such as with the Oakland Athletics and their famous Moneyball tactics, the numbers-based decisions work out. Sometimes, such as with GM, a less numeric approach probably would have been not only a better decision for thousands of Americans, but it would have told a far more favorable company story.
While not directly related to GM, a 2017 study by Cone Communications, ‘revealed that 87 percent of consumers said they’d purchase a product because a company advocated for an issue they cared about and more than 75 percent would refuse to purchase a product if they found out a company supported an issue contrary to their beliefs.’
At the very least, those numbers demonstrate that consumers care about the actions companies take and factor those decisions into how they spend their money. To consumers, the company story not only matters, but matters deeply.
There are plenty of examples of people and organizations sticking to their core principles in the face of profitable numbers. Think about teachers who use their own money to buy supplies for students when the numbers tell them that doing so is not a smart financial decision. Think about the booksellers who pulled their offerings off of Amazon subsidiary AbeBooks, prioritizing protesting for the justice they believed in over their own profits. Think about lawyers who take on cases pro bono because they know it’s the right thing to do.
It makes sense why numbers are championed, though. In line with the fact that numbers point to definite results and absolute truths, there’s an innate human need to rationalize our decisions, if not for ourselves then for other people. It’s easier to rationalize with numbers because numbers definitely are what they are and definitely are not what they are not. With qualitative measures, people must trust judgments that are relative from person to person, if only in the slightest.
For example, if an NBA player is shooting 47% from three-point range, then he’s shooting 47% from three-point range. However, if that same NBA player appears to be a bad culture fit for a team, that’s a qualitative judgment relative to not only each team’s culture, but further relative to each person who observes that player. It’s easier to get a fan base on-board with the logic of, ‘look, we’re going to plug this 47% three-point shooter into our system and we’ll be a better team,’ than it is to get them on-board with, ‘hey, y’all, we’re going to plug this moody 47% three-point shooter who may or may not be a drain on team chemistry into our system, cross our fingers, and pray real hard to the basketball gods.’
Along with being rational, there’s a level of professional safety in following the numbers.
And yet Allen Iverson would have loved to keep Vernon Maxwell around simply because Vernon Maxwell made Allen Iverson feel safe and secure on the court.
And yet thousands of GM employees would love to know that they’re not getting laid off in the near future because it’s nice to have a job you can rely on.
That’s because humans aren’t machines. Numbers might make machines, simulations, and mathematical formulas hum like things of beauty, but humans don’t follow set protocols. That’s why intuitive judgments matter so much when dealing with real people.
What if the Sixers had trusted their hearts instead of the numbers? What if General Motors had said, ‘look, short-term, it’s going to be really expensive to update these plants so thousands of people don’t lose their jobs, but long-term we’re remaining committed to American jobs and the communities in which we’ve established our brand. That’s the most important part of our story.’
There is a rationality to following your heart instead of the numbers. There is a time and a place to take risks in order to do what is right.
When a commitment to the core principles of your company’s story can subvert numbers screaming for you to stray from beliefs that should not be abandoned, that’s when a story becomes authentic, because the story becomes more than words. The story becomes action in the face of conflict. The story becomes proof of a strength of character that people can rely on.
Yet time and again sports teams follow the numbers like dogs hot on the trail of the sweet scent of winning. Too often, businesses follow the irresistible numerical scents of money and sales figures in the face of harming people’s lives.
What would the world look like if more organizations had a better feel for when the numbers were leading them astray from who – deep down, at their roots – they not only wanted to be, but were founded to be?
Perhaps more important, what would that world feel like?
Probably more humane. Perhaps a place in which people could more easily trust.
At the end of the day, I don’t have the answer as to when companies should use numbers and when they shouldn’t. That answer is relative to every organization and its intended purpose. What I can say, on behalf of at least me and Allen Iverson, is that sometimes numbers are powerful tools, and sometimes they aren’t the answer.