Statistics have never been my thing. Math was the most challenging coursework for me in high school; I loved algebra, and disliked geometry and calculus. I dropped out of a master’s program because my first class was statistics. I was late to the first class and felt I would never catch up. (It was an MFCC program and I surmised I was too empathetic to be a therapist, so the decision was fairly easy.)
In my adult years, I put off actively using a personal budget until this year. I tried multiple times but could never get the numbers to work for me.
Despite this hole in my skill set, I recognize the growing importance of numbers, particularly in business. In my career as a corporate board recruiter, I am diving into finance. I am reading Adam Epstein’s book, “The Perfect Corporate Board: A Handbook for Mastering the Unique Challenges of Small-Cap Companies,” and I can tell it will continue to serve me as a reference guide even after I’m done. Just like my high school calculus teacher, Epstein challenged my brain with complex investment banking terminology and procedures. But because he is so engaging, and bursts the bubble of one-size-fits-all corporate governance so effectively, he is holding my attention.
Stats and data are critical to any business. This concept is most evident in the business of sports. Jay Caspian Kang’s New York Times Magazine article “Why are some new statistics embraced and not others?” examined why ”exit velocity” caught on in baseball this year. Kang describes Tom Tango, the senior architect of stats for MLB Advanced Media, as the man responsible for turning data into “baseball stats that not only capture what’s actually happening on a baseball field but also engage the average fan.” Exit velocity — the speed at which a ball leaves a bat — gave fans a new way of measuring how hard some hitters smash their home runs.
Can the same thing happen in other businesses? Absolutely! As a CEO or board member, you can get stats that capture what is happening in your company in a format that your stakeholders will embrace. Consider cyber risk analysis. In the wake of cyber security breaches that hit companies like Equifax and Deloitte, and even the Securities and Exchange Commission, a new field has emerged of cyber quantitative risk analytics, in which companies try to put a value on the data that gets compromised.
CEOs and board directors need to examine the impact these breaches can have on their corporate assets. To do that effectively, you need to follow some simple steps:
- You have to know what the assets are. They have a value.
- Then you can work with your chief information security officer, or CISO to apply some risk analytics techniques to rank or quantify the risks and allocate your budget.
- At that point, thanks to the beauty of statistics, you will know what your data is worth, and how much you can afford to spend to protect it.
So don’t shy away from the numbers. The odds are good that they’ll help you hit a home run.