Figures Don't Lie!

It's no secret that people manipulate statistics and figures on spreadsheets in order to make it appear the way they want it. Books are cooked, data is mixed and rearranged in order to tell a specific story. The only time that is not the case is when an audit takes place to verify and validate numbers according to accounting standards.

Yet, there are no set of standards for almost all internal operations of a company. Only at the end of the line are standard GAAP (generally accepted accounting practices) adhered to. And on top of that, rarely are firm's books audited (I know, I know. Books are audited frequently, but give me a bone, here!).

I had a very smart product manager in finance who had elaborate spreadsheets showing margin, profitability, rate and all the other important ingredients he needed to use in order to give us rates. He had explanations, figures, facts and all the supporting information to choke a horse. As a result, my office always had to accept his decisions because there was no use in trying to dissuade him from figures he had decided upon.

I would groan or frown when he gave us our pricing changes and maybe even make a weak protest about how far out of whack his pricing was considering the competition. Nevertheless, Gary would stick to his guns. He was one tough character.

About 10 years later, I had cause to talk to Gary at his new position in a bank in Pittsburgh and I was in profitability consulting. The discussion turned to old times and then...he confessed! Gary said that when he made new pricing decisions, he just made it up! He pressed us to get the highest rate he thought he could get us to swallow and manipulated his spreadsheets to "validate" his opinion.

Oh, his figures didn't lie. Gary just did. The numbers on the spreadsheet were real, and they computed correctly and there were actual relationships built in. But, in the real analysis, he pulled a number out of his ass and ran with it, sometimes just to see how we would react.

Because of Gary's "Silly Wild-Assed Guess" (or SWAG) method of pricing, he put a lot more undue stress on my sales' team and me, but, got very high yields on the portfolio. During his and my time at that particular operation, we made a boat load of money for the bank!

That still doesn't excuse Gary for lying to me. It does show a great example that figures don't lie, but, liers use figures. Even if proof is made, is it worth believing? Who do you trust? I guess, the audited books.