How do executives decide what is really true – especially when their resulting actions are likely to affect others? Inevitably, there’s a strong temptation simply to endorse ideas that support your pre-existing views. However, applying a few simple tests can ensure your analysis is reasonable, rational and rigorous.
The economist Tim Harford has tried to simplify the task when it comes to statistics, with six essential guidance points that ‘can fit on a postcard.’ These are: observe your feelings (defensiveness, triumphalism, righteous anger etc) and how these affect your decisions; understand the statistical claim (what it means, is it causal, and what is left out?); get the back story; put things in perspective (size, history, and significance); embrace imprecision; and be curious. Everyone has their own distilled, postcard-sized words of wisdom. Here are six more, from FT | IE Corporate Learning Alliance, for executives to consider:
- Question the source of your information. This is not as obvious as it sounds. (saying ‘…but everyone knows that!’ doesn’t cut it). If your information came from a colleague, parent or friend in the pub, ask where they got the information? Keep probing. If you’ve held the same views since your teenage days, and can’t recall the source, it might be time for a reassessment.
- Seek out opposing views as a matter of intellectual discipline. Ask yourself which organisation, friend or newspaper opposes your view, then seek out their perspective no matter how disagreeable. If nothing else, it will help you refine your own arguments.
- Solicit the opinions of strangers. Professional pollsters don’t always get it right, as recent election results have shown. Although unscientific, simply talking to voters or customers who you might not normally interact with, and asking without prejudice what they and their friends are thinking and feeling, might just reveal something your market research is missing.
- Beware over-confidence – never be 100 per cent sure. An easy way to be embarrassingly wrong is to have been right the previous time. Even if it wasn’t a lucky guess, it’s easy to believe in your own omniscience. At least present your viewpoint as the most likely scenario of several, perhaps adding a percentage chance of it happening.
- Learn how it feels to be on your own. Career-wise, going against the consensus can be a bad move, especially if you’re not entirely sure yourself. Yet sometimes being right, by definition, puts you in a tiny minority. For example, selling shares at the top of the market (or buying at the bottom) requires you to disagree with almost everyone. So familiarise yourself with such emotions as vulnerability, fear, greed and panic that typically accompany certain moments in business so those feelings don’t overwhelm your logic.
- Explain your actions directly to those worst affected by them. If you hold a contentious opinion or are about to make a painful business decision (such as laying off staff) one safeguard against unreasonableness or prejudice is whether you can explain your decision face to face to the person worst affected.