Sticky Business

Why is it so hard to communicate?

Photo: Andrea Church. Source: Morguefile

Anyone who’s ever tried to teach a complex idea has run into the “knowledge curse”—if you know something really well, it’s hard to think about it from the perspective of people who don’t have your level of understanding. My kids have this problem when they try to teach me about the latest app on their smartphones. It’s not that I’m dumb, it’s just that I don’t have their experience.

Investment people face this issue, too. There’s a lot of jargon and specialized language in finance, mostly used for shortcuts and abbreviations. Sometimes people accuse us of purposely trying to complicate the language so we can sell financial products. But don’t assume malevolence when incompetence will do. The math behind investing is hard, and we’re just not very good at explaining things—especially nonlinear concepts.

Complex vector. Source: Wikipedia

If we want to explain something, we need to keep it simple, use concrete images, and tell stories. People are hard-wired to think in terms of narratives, but the stories need to use real language about real things from everyday life. Good speakers do this: they illustrate their ideas with tales from nature, or sports, or something else we can relate to.

Once we know something, we can’t un-know it, and it’s hard to imagine what it was like before we understood it. But if we want our ideas to “stick,” we need to stay away from jargon, and focus not on what we know, but on what our friends don’t know. The best teaching—and the best products—tell simple stories that change lives.

Isn’t that what good communication is about?

Douglas R. Tengdin, CFA

Chief Investment Officer

By | 2017-07-17T12:22:05+00:00 April 12th, 2016|Global Market Update|0 Comments

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