Business Significance of Numerical skills

When you embark upon the journey of becoming a management professional, it would be prudent to spare a moment to understand what the Critical Business Skills for success are, Critical thinking and Problem solving skills . There is ample material available on the definitions of the terms but in common language, it would be the capability to analyse problems /contexts and evaluate alternatives and measure and solve problems. 

1. Problem analysis: The ability to analyse problem situations and identify the significance of key/critical data elements
2. Evaluating alternatives: The ability to evaluate options accurately and establish priorities
3. Precise contexts: The deductive reasoning skills necessary to anticipate outcomes and see logical consequences.  (logical reasoning)
4. Ambiguous contexts: Problem solving in contexts of risk, ambiguity and uncertainty (inductive and inferential reasoning)
5. Quantitative contexts: The ability to reason well in contexts involving numerical data. Business problem solvers must demonstrate the ability to interpret and evaluate vital information presented in a variety of numerical formats in order to reach an optimal problem solution.

Critical thinking and problem solving

Arithmetic/Numerical  skills are associated with cognitive abilities and are reflective of a one’s critical thinking and problem-solving ability. 

What constitutes Numerical ability

• Basic Arithmetic  (knowledge of numbers , Calculation skills)
• Representation of data (Measuring and understanding data, Budgeting)
• Interpretation of tables (Understanding the relationships between numbers)
• Interpretation of graphs (Understanding the relationships between numbers)
• Analysis  of patterns (understanding trends)

Where it helps

In day-to-day Business one comes across numerous occasions where the dispute/debate is based on data in hand. The general notion that facts are indisputable is true but the differences many a times is on interpretation of data. People understand the numbers in their own perspective or notion of convenience and advantage . This is where one needs to be nimble with one’s numerical abilities and be ready to take advantage of or defend oneself from being taken advantage of .

This is an over simplified version of business scenarios intended only to give out the significance of numerical skills in business. Let us assume that A is a sales executive reporting to X and A has been given a particular territory and a product portfolio. There are sales targets for A and let us assume for sake of simplicity that A was given a target of Rs 1 Cr  turnover for year 2018 and he has been able to achieve that and subsequently added 1 cr to  his turnover every other year ie., 2018- 1 cr, 2019 – 2 cr, 2020 – 3 cr, 2021 – 4 cr 

A looks at his consistent performance and walks up to X saying that see I have been a consistent performer over the last few years and hence needs a raise. I have had a 4X on turnover over the last 3 years. 

1. X says that your performance has been falling over the years and shows him the following growth rates, 

1. 2018-2019 – 100% 
2. 2019-2020 -50%
3. 2020-2021 – 33%

You are now encountered with the same data and both of them are right from their perspective  This simple example tells you how the same data can be read in 2 different ways , based on the measure you are looking at and to have these measure worked out one needs to have the necessary skills in basic calculations, percentages etc. Further to put things into perspective one needs to have the capability of categorising data into tables and representing them in graphs so that a comprehensive and concise representation is made for decision making.