Global Frankness Crisis contributed to the GFC
It’s a little-known fact, but not long ago the Commonwealth Government hired some corporate management consultants to update our national anthem. The first verse became:
Australians all let us rejoice: National stakeholders going forward should be committed to visionary communications
For we are young and free: For we incubate next-generation scenarios that leverage dynamic functionalities
With golden soil and wealth for toil: With mission critical infrastructure to maximise world-class deliverables
Our home is girt by sea: Our brickware harnesses frictionless supply chain scenarios.
Unfortunately, the text suffered from ‘a high-end negative architecture scenario’, which meant the words didn’t actually fit the music, and the idea was scrapped.
Okay, I made that up, but unfortunately it’s not all that far from reality. Here’s what one corporation actually wrote recently:
As a means of simultaneously decomposing both the optative and indicative parts of a requirements problem, from an abstract business level to concrete system requirements, we leverage the paradigm of projection in both approaches while maintaining traceability to high-level business objectives.
Come again? All this means is something like ‘our service will help you solve practical problems while keeping an eye on the business overall’. I think.
But while it’s easy to play up the comedy of corporate speak, it also has a very serious side to it. The evidence is emerging that complex language was a major contributor to the global financial crisis.
If that sounds like a far-fetched claim, consider the case of the Opes Prime collapse.
One of the investors in Opes Prime was a stockbroking firm called Beconwood Securities. When Opes Prime went under, Beconwood took court action to recover its money, arguing that the documents it had signed were so complex that it didn’t actually understand the product it was buying. Beconwood apparently didn’t realise that its own shares were actually owned by Opes Prime’s bank.
It lost the case, as the judge ruled Beconwood to be a sophisticated investor that should have been able to work it out.
But the fact that a stockbroker couldn’t tell the difference illustrates a major factor in the global financial meltdown. Financial documents got so complex that nobody in the system could tell who owned what and who owed what to whom. So they all stopped lending to each other. The financial system froze. The rest we know.
And it hasn’t stopped there. While the international financiers were licking their wounds, major corporations started to get in on the obscure language act, spinning their situation for all it was worth.
When GM announced its bankruptcy, for example, it wrote to its ‘stakeholders’ explaining: ‘As you may know, GM is using an expedited, court-supervised process to accelerate the reinvention of our company.’ When Air New Zealand had to shed staff, it announced it would ‘disestablish up to 200 full-time jobs’.
It’s time for the corporate world to learn that poor language is not good for business.
A few years ago, the Royal Mail in Britain surveyed the public about the writing they receive from companies, and discovered that one-third boycott products specifically because of the quality of the writing. This was costing UK firms a staggering $10 billion a year in lost trade. Those figures translated to the Australian economy would be some $2 billion.
And according to a survey of 1,214 American homeowners and investors conducted by Siegel+Gale, 84 per cent are more likely to trust a company that uses jargon-free, plain English in communications.
Seventy five per cent also believed that language complexity played a significant role in the current financial crisis. Sixty-three percent felt that ‘banks, mortgage lenders and Wall Street intentionally make things complicated to hide risks or to keep people in the dark.’
Another American survey found that companies scoring high in spin posted financial results up to six times worse than those that write in plain English. Only 11 per cent of the top 25 firms lapsed into jargon, but more than half of the bottom 25 firms did.
Memo to all those corporate spin officers out there: we’re onto you.
And if those numbers aren’t enough to make corporations sit up and take notice, the regulators are already getting in on the act. President Barack Obama has recently spoken out against poor financial and credit documents, and the United States Congress and Senate are already considering a plain language bill. This will make plain English compulsory in all Federal government documents.
America will join countries as diverse as Sweden, Mexico, the Netherlands and even New Zealand in mandating plain language.
Yet Australian government and industry are still to introduce similar measures for plain English here. The global financial crisis suggests we have much to catch up with. Our Prime Minister has been quick with a financial package, yet his own language is at times barely comprehensible, swinging between officialese, jargon, cliche and ockerisms.
What we need now is some strong action from government and business that will prove they take clear communication seriously. If other countries can introduce plain language laws and regulations, why can’t we?
Dr Neil James is Executive Director of the Plain English Foundation and the author of Writing at Work. The Plain English Foundation is currently hosting the Plain Language Association International 7th Biennial Conference. www.plainenglishfoundation.com
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