A hard lesson that I learned as a young neophyte in the oil industry was the true meaning of garbage in, garbage out. Until that epiphany, I thought that impressive charts, graphs and presentations had to be correct because they looked so good and seemed to be so believable – particularly if they agreed with my own preconceived notions.
Then one day I was promoted to a position which made me responsible for generating the same kind of output which I had previously admired so naively from afar. It was then that I realized that conclusions drawn from impressive looking formulas and surveys are only as good as the numbers and assumptions that are put into them.
That seems obvious, and it is certainly not news to anyone who has been in the planning business. But the fact is that all of us human beings incorporate certain biases and historical baggage into our daily work. When marketing gurus, advertising agencies, academics and planners develop studies, formulas and theories to explain what is happening, they are often just plain wrong – mainly because of their own unconsciously selective input and biased approach.
A personal garbage in, garbage out case in point: The subject of this column originally was to be branding, as it specifically relates to the lubricant business.
Doing research, I found a chart reprinted from the Chicago Tribune which purportedly showed the 2006 market value and ranking of the 10 best global brands. They were listed in order of their calculated value as Coca-Cola, Microsoft, IBM, GE, Intel, Nokia, Toyota, Disney, McDonalds and Mercedes.
In order to learn how the chart was derived, I went to the web site of the consulting firm which had developed the rankings. There, in glorious color, the data was presented as part of a joint venture with a well-known national business magazine. (Disclosure: That particular magazine had shown no remorse for once grossly misquoting me on a refinery project.)
The Internet site listed the 100 most valuable global brands, but included only two oil companies, ranked 76th and 89th respectively, and no lubricant brands. Emphasis seemed to be placed on pharmaceutical, cosmetics, digital, luxury and financial brands. The listing firm also conveniently mentioned that it was available to assist in promoting some of these very same product areas. Oddly, none of Procter & Gambles or Hersheys famous brands were listed.
In an effort to check methodology, I read through some impressive verbiage. But, unfortunately, the formula used in the ranking was never revealed, and the point of it all seemed to boil down to trust us, weve been doing it a long time. The only conclusion I could draw was that the input must be fairly subjective but consistently applied. Thats not good enough, so I dropped the idea of using their information.
The point of all this is that there are business people, including managers and executives in our industry, who accept output from professionally presented studies at face value, when they should in fact be questioning the whole process behind those studies – particularly if they plan to use the resulting conclusions to plan business strategy or make important decisions.
Most of us know this, but this recent experience was certainly a reminder to me.