By Bob Beuerlein
This is the time of year when “Take Me Out to the Ball Game” is most often heard, as many of us enjoy going to a baseball game to watch America’s pastime. This is a wonderful opportunity to spend time with family and friends, enjoying an evening together while eating hot dogs, peanuts, and other food that just tastes better at the ballpark. We all know about the balls and strikes and the hits and runs associated with the game, but how many of us think of baseball as an elaborate exercise in communication? The signs and signals that coaches give to players, telling them to bunt, steal, etc., or that catchers give to pitchers to tell them whether to throw a curveball or a fastball, is akin to a sophisticated form of cryptography.
Like baseball players who must learn to communicate effectively if they are going to play in the major leagues, so also professional actuaries must develop advanced communication abilities to be effective. Actuaries are experts at working with complex issues on a day-to-day basis and at using or developing advanced techniques to address these issues. We all know actuaries who are very good at using these advanced techniques but struggle with being able to communicate the results. But the good news is that we can all become effective communicators with training and practice.
Some people may say that actuaries work with a “black box” to provide answers to complex issues. Whether it be a computer program, Excel spreadsheet, or just some musings within the actuary’s mind, a black box is characterized as a process in which information goes in and results come out—with little transparency around the workings of the process. A magician takes immense pride in using a black-box process that allows him to pull a rabbit out of his hat, much to the amazement of the audience. But actuaries should not be viewed as magicians.
Indeed, actuaries have an obligation to dispel any perception that they use a “black box.” Further, actuaries need to turn this black box into a “glass box.” Precept 4 of the Code of Professional Conduct states: “An Actuary who issues an Actuarial Communication shall take appropriate steps to ensure that the Actuarial Communication is clear and appropriate to the circumstances and its intended audience, and satisfies applicable standards of practice.”
How can we achieve this objective of making our communications clear—of creating a glass box around our work—and why is it so important to our profession? The Dalai Lama is credited with the quotation, “A lack of transparency results in distrust and a deep sense of insecurity.” A corollary to this idea is that transparency can lead to trust and a sense of security. Actuaries have earned the trust of the public over the years, and maintaining this trust is imperative to fulfilling the profession’s responsibility to the public. Just as baseball players adapt to different game conditions, so must actuaries adapt to the environment in which they operate to create this glass box.
Actuaries work with complex issues, and they must communicate their results and findings to a wide variety of audiences. Although communicating in various conditions and environments is something of an art, it is also a skill. Many skills can be learned and developed with practice by people who are willing to devote the time and effort. Actuaries should view this challenge of putting a glass box around their work as a skill that can be learned and developed through training, practice, and working with others. Whether it be explaining a technical spreadsheet to fellow actuaries or making a comprehensive presentation to senior management, a glass-box approach builds understanding and trust with your audience.
So, the next time you turn on a baseball game on TV, watch for the intricate series of signs that the coaches and players are giving, and think about how they’re effectively communicating with one another. Then think of your communications at work: Are you communicating as though all of your results come out of a black box, or are you effectively communicating with a glass-box approach? I think you’ll hit a home run if you use your glass box.