The Hindu Business Line : Navigate carefully through numbers

For, as someone regularly imbibing business and economic news, you’d agree that, when in excess, numbers could be numbing; more dangerous could be the effects when the numbers turn out to be wrong.

Which is why you need help from careful sceptics like Gene Epstein, the author of ‘Econospinning’ ( www.wiley.com ). The book by the Barron’s Economics Editor is about ‘how to read between the lines when the media manipulate the numbers’.

The title-word, he explains, as ‘the sort of economic journalism that shapes the data around a predetermined story, rather than the story around the discoverable data.’ We need a real discussion of the quality of economic and business reporting, analysis and commentary, the author demands, because the ‘how’ of economic data interpretation affects ‘economic policy, business decisions, investment planning, and trading strategies for the individual and professional.’

Economics reporting is far more complicated than most other forms of reporting, concedes Epstein. However, that is no excuse for the serious foibles he highlights in the book; such as, ‘the preference for sizzle over substance,’ ‘sloth, ignorance, emotionalism, and opportunism.’ He is categorical, therefore, that the journalist’s oath should be, ‘First tell no lies,’ akin to the physician’s, ‘First, do no harm.’

With the increasing expansion of media and technology, don’t we have more knowledge on a net basis?

Perhaps, yes, but the gross quantity of obfuscation expands, Epstein rues. Econospinners are not limited to journalism’s traditional practitioners, he cautions readers. They come in all forms other than regular reporters – as ‘professors, policy analysts, politicians, or public intellectuals.’ The book launches an acerbic attack on some of the hyped economics columnists and researchers, influential authors and authorities, to serve as ‘a corrective to certain misconceptions about the economy.’

Compulsory read to sharpen ‘your ability to discriminate between good and bad coverage of the economy.’
Traits for success

Everyone need not have the professional qualification as an engineer or a chartered accountant, but what matters is the right interpretation of data and your ability to look beyond the same.
Thus instructs Partha Sarathi Basu in ‘Why not…! Racing ahead with mentors’ ( www.ubspd.com ).

Written as a story, the book is about traits required for success in the corporate world. For instance, in a chapter titled ‘simple thinking’, the author emphasises the role of common sense; ‘mastering the right word’ is about accepting responsibility for what you say; and in a discussion of ‘bad times’ Basu shows why intelligent action is a must during difficult stretches in life.

Arrest any negative spiral, he advises. “It is a thin line between winning again versus start losing forever. You need to win. Think positive. Engage yourself, show up and be present. You need to force yourself to be busy again.”

Advisory for coping with adversity.
Fear of poverty

The roads that lead to poverty and riches travel in opposite directions, says Napoleon Hill in ‘Think and Grow Rich’ ( www.jaicobooks.com). Fear of poverty is a state of mind, but it can destroy one’s chances of achievement in any undertaking, he explains.

“Fear of poverty paralyses the faculty of reason, destroys the faculty of imagination, kills self-reliance, undermines enthusiasm, discourages initiative, leads to uncertainty of purpose, encourages procrastination, wipes out enthusiasm, and makes self-control impossible.”

If that’s frightening enough, there’s more: “It takes the charm from one’s personality, destroys the possibility of accurate thinking, diverts concentration of effort, kills persistence, turns willpower into nothingness, destroys ambition, beclouds memory, and invites failure in every conceivable form.”

Persuasive messages.

Innovation for competitive edge
Do something new, something that is different from what your competitors are already doing, say Anja Foerster and Peter Kreuz in ‘Different Thinking’ ( www.vivagroupindia.com). “You need innovation that, at least for a short time, will give you the competitive edge that comes from offering something unique,” they add.
But isn’t it often the case that companies decide in favour of the quicker option of getting off the mark by copying someone? Regrettably true, the authors observe. “This arises from the assumption that being a pioneer is a very risky business.” A corollary myth is that it is really safer to quickly copy others than to be the first one to offer something new and completely different.
You may wonder if some products can be so mature that any differentiation would be almost impossible. Not necessarily true, say Foerster and Kreuz. They cite the automobile industry for example. “There is no such thing as a bad car anymore, they are all good! No matter which car maker you look at, whether it’s Toyota, Renault, Volkswagen or any of the others, nowadays they all have state-of-the-art technology.”
In today’s markets, it is no longer a question of who has the more powerful engine or the lower air drag coefficient, reason the authors. “The area of differentiation lies elsewhere: design, service, image, and people are important factors. And it is a question of distancing yourself from the grey zone of mediocrity and doing something that will take your rivals by surprise.” Like Tata Nano?
While the world’s cheapest car may be for everybody, the case that the book discusses in this context is of Bruno Banani Underwear, a company with the marketing slogan, ‘Not for everybody.’ Every month a new model of their product goes on sale. But since the production is in limited edition, there is artificial short supply, thus making the company’s underpants a collector’s item. Also, it has triggered a real cult using unconventional promotion methods. “Bruno Banani underwear has successfully proved its tensile strength and good fit in space, in nuclear research centres and under deep-sea conditions.”
Price is an unmistakable differentiator, the authors note. Only, you must not waste time in marginal variations but work on radically, like Ryanair exemplifies. “They didn’t focus on being 2 or 3 per cent cheaper than the established airlines. They asked themselves, how can we make our tickets 60 or 70 per cent cheaper?”
How do they manage to do so? “Customers book online, so the company doesn’t have to pay commission to travel agents. Ryanair drastically reduces take-off and landing charges by avoiding the big expensive airports and flying to smaller provincial ones. It aims for full capacity utilisation of its planes, reduces ground time to a minimum and so on.”
Not too different were the measures that Girish Wagh and his team had to resort to, in Tata Motors. “In came benchmarking, purchasing from Internet auctions, outsourcing parts to more efficient suppliers and boosting revenue by selling Tata-made dies to other companies,” Robyn Meredith recounts in an April 2007 article titled ‘The Next People Car’ in Forbes.
“E-sourcing idea has become routine for Tata,” she adds. The company “ran 750 reverse auctions on Ariba in the past year to bring down purchasing prices by an average of 7 per cent for everything from ball bearings to the milk served in the company cafeteria.”
Innovative ideas.

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