A little story with several points: I was browsing through recent changes to Facebook today, exploring some of the ways a user can track and consolidate information about a network. While researching this topic, I saw that Hanson Hosein (the Director of UW’s Masters in Digital Communications group @hrhmedia) had “liked” the new Edelman Trust Barometer report.
As I respect Hanson’s reputation for “knowing the good stuff” I decided to read through the report with a little more interest than usual, given that I have a reputation “for knowing reputation.”
The report in total is a good insight, but like many other analysis of different topics: some of the comparisons are misleading in nature. One such example is the chart below.
Either chart is individually correct, but we really need to disregard two things: one is the title of the figure, the second is the red comparison arrow.
The title “Financial performance least important to corporate reputation” is misleading.
If we compared the two financial statement lines from 2006 (Strong Financial Performance) and 2010 (Financial Returns) they illicit two different reactions. We have to keep in mind that every person who interprets a question is going to have a slightly different view, but from my standpoint this is how I interpret them:
- Strong Financial Performance: this could relate to stocks, healthy profits, good employment compensation, and a whole range of financial values in a corporation. This is a more holistic term that encompasses the entire business.
- Financial Returns: refers to profit, A.K.A. the bottom line. It is only a small segment of the strong financial performance category used in 2006.
Depending on the method of survey,
- in a multiple choice answer we have psychologically led our survey group down two different lines of thought. If this is the case, the survey wording was flawed for comparison.
- if the survey was fill in your own answer, then we know that “financial returns” really isn’t the least important to corporate reputation…. it is simply rank 10 (which would be followed by answers 11 through 200.)
Why note this?
When examining metrics and relying on someone else to do the analysis, I think that we should always keep in mind the question: is this comparison apples to apples, or apples to steak?
In many reports, it is often the visual magic of a chart that draws our attention and makes us disregard the detail of the issues at hand. In the example above, perhaps it would have been a good idea to disregard that little red arrow.
If we also take the data and do not accept the conclusion of the analyst, you can see that the 2006 “financial” was 42% and the 2010 “financial” was 45%.
*if* I was going to compare the apples and steak, the 3% gain indicates that financial issues are more important in 2010 than in 2006.
Conclusions
- Hanson always finds good food for thought.
- The report is good, just keep in mind that we all need to come to our own conclusions and it is our personal responsibility to ask questions.
