08 July 2014
Using buzz-words appropriated from other domains incorrectly is about the worst thing that a manager or public figure can do. This is guaranteed to make smart people think you are stupid. Two examples I often hear are the word “quantum” and the phrase “sovereign risk”.
“Quantum” does not mean “total”. It is the plural of “quanta”, meaning the most basic unit a thing consists of. Outside physics, it most common use is in law, applied to compensation amounts derived from the application of several different legal axioms. In context, the word's subject is some or all of the multiple amounts, not their total amount. This is an important distinction.
When a CEO stands up at an AGM and starts their address with, “We confidently forecast the quantum of revenue next year will be 20% higher than this year”, without any context of the units that make up the revenue, that man or woman is using a big word to try and impress people. And failing dismally.
“Sovereign risk” is appropriated from the finance industry where it means the probability of a state defaulting on interest payments on its treasury bonds. The phrase entered common parlance in the 2011 European debt crisis where Greece and a few other nations came close to default. How many Australian pundits, politicians and executives now use the phrase to mean any uncertainty in proposed government action or to simply criticise a policy they don't like? I've heard lots of 'em on ABC's “The Business” alone. And either consciously or unconsciously the purpose is to allude to the chaos in the streets of Athens we all witnessed on TV.
How does this sound to people where this phrase still has its specific finance domain meaning? I think its likely to lower confidence in Australian economic stability. That can't be a good thing.
When you use technical words incorrectly and appropriate phrases out of context, you can do a lot of damage to your own reputation and produce all sorts of unintended and unpredictable effects. And smart people will think you're an idiot.