Avoid Fatal Errors by Avoiding Untested Conclusions

You see your father fall to the ground. A stranger runs to him and grabs your father's neck. Afraid that the stranger is choking your father, you pull the stranger away. Only then do you notice that the stranger has been loosening the tie around your father's neck to help him breathe better. Oops! Your action had delayed giving your father the resuscitation he needs to save his life.

This is but a brief example of how we often draw wrong conclusions from what is going on around us. Wrong conclusions can often lead to fatal errors for organizations by causing them to take actions that make their problems worse.

MISCONCEPTION: The Danger of False Assumptions Abounds

A misconception is based on a belief that was never true. Here are some examples of harmful misconceptions that harm businesses:

-The future can be accurately forecast.

-Competitors will stand still while we make rapid progress.

-Agreement among colleagues means that issues are understood.

-Customers will make the decisions in the same ways they always have.

All long-held assumptions and beliefs should be questioned. Ask yourself:

-Is it really true?

-If it isn't true, why do people believe it to be true?

-What's needed to persuade people to change their beliefs?

Round Out Your View

When only an experiment will do, cross-check your idea in other ways to get a better sense of what you are about to try. Consider Columbus. While some feared sailing west across the Atlantic believing they would fall off the edge of the Earth, Columbus knew better. He had made a point of studying the early Viking explorations of North America. In fact, in 1477, 15 years before heading toward the Caribbean, Columbus visited Iceland to learn more about the northern "islands" across the Atlantic.

Apply Sophisticated Thinking

In his wonderful book, The Unschooled Mind (Basic Books, 1991), cognitive psychologist Professor Howard Gardner argues that people usually think at three different levels. Gardner defines the five-year-old's mind as the first level. Five-year-olds usually live in a world where others take care of them and keep them safe from harm. That belief persists when most people become adults and prevents many from becoming independent, fully functioning adults. Overprotection after age five makes matters worse. Another common example of the five-year-old mind is that confident people falsely believe that they are superior in every way to others. Ask any roomful of five-year-olds if they are terrific at something and almost all will agree.

The second level of thinking develops when training, usually in high school and college, gives teens and young adults a grasp of sophisticated concepts that are counterintuitive to the five-year-old's thought process. Here's the problem: The student memorizes the concepts long enough to pass the examination. But Gardner argues that relatively few adults reach the third level of thinking where they can apply the sophisticated concepts to real-life problems. In the absence of that faculty, almost everyone reverts to the five-year-old's misconceptions for making decisions.

The person who can apply the principles learned in school to a real-life situation becomes a disciplinary expert. But those effectively working minds are few and far between in most organizations. Think of what could be accomplished if you consciously shed your five-year-old's misconceptions, applied sophisticated adult reasoning to expert knowledge, and questioned common assumptions of the prevailing five-year-old mind.

I'LL GET RIGHT ON IT

Even if people attempt to apply sophisticated thinking, they will still jump to conclusions too often. If service was slow the last two times you went to a given store, you may decide this store will always offer poor service and don't go back. Statistically, two experiences do not constitute a trend. It's possible that the manager was away on vacation on both occasions and the rest of the employees took it easy.

The executives of one award-winning multibillion-dollar manufacturer were clearly intelligent, well educated, and widely admired for their decisions. Ever curious, these managers wanted to measure the quality of their decisions. They knew good decision making has to reflect solid statistically based data, and they wondered what statisticians would say about their decisions. Statisticians were assigned to follow the executives around for six months to watch them in action. Almost without exception the executives treated random events as representing what was typically occurring in the business.

Executives were constantly trying to eliminate these few random variations in performance. All this scurrying around kept the executives from having time to work on more promising opportunities for gain. Despite learning this profound insight, the organization faltered by continuing to mistake the actual trends. The lesson: Be sure you are focusing on the areas where action will do the most good.

This example also shows how wide the gap can be between perceptions of management quality and actual effectiveness, another example of misconceptions. You have probably noticed the frequency by which "widely admired" companies rapidly fall from grace as performance plummets.

When the CEO Speaks, People Take Action

Management authority Peter Drucker told us that one of the most dangerous beliefs in organizations is that an increase in brains comes with being promoted. Here's verification of that observation: Executive assistants at selected companies were asked by us what was the single, most important thing their CEOs could do better. The aides spoke almost as one in reporting that anything the CEO said was treated as gospel. Underlings, for instance, scramble to make changes even when the CEO was only asking an innocent question. The CEOs assume that the response would come at little or no cost from someone who already had the answer. Some executive assistants estimated that 25 percent of executive and managerial time in their companies was taken up with answering such casual inquiries and making changes that hadn't, in fact, been requested. The assistants wished someone would advise their CEOs to stop asking casual questions and making off-hand comments because the rest of the organization operates on the misconception that these words are major priorities on which careers will rise and fall.

STALLBUSTERS

Encourage Unmasking False Assumptions

A company had assumed for decades that advertising would work only when demand was highest for its seasonally consumed food, yet others promoted similarly seasonable foods all year around. Eventually, an advertising test was run during the lean part of the year, and sales promptly took off.

Here are questions to help you avoid making such false assumptions:

-What are the things that your organization assumes will almost always work?

-What are the things that your organization assumes will seldom or never work?

-What are the things that your organization assumes will probably happen?

-What are the things that your organization assumes will be unlikely to happen or will never happen?

-On what beliefs are these assumptions based?

-Have those beliefs been checked recently?

-Are those beliefs still true?

Identify the False Assumptions That Need to Be Immediately Challenged

Some misconceptions require more immediate correction than others. Here are questions to help you set priorities for where to turn your attention first:

-Which false assumptions have large potential consequences?

-Where can your organization's actions make the largest difference in offsetting false assumptions?

-When would you need to act to get the most benefit or avoid the most harm?

-What is the minimum evidence to indicate that you should act immediately?

-Use Assumptions That Reflect Actual and Critically Sensitive Conditions

-Open your mind to new ways of thinking about a volatile, unpredictable future with these questions:

-What assumptions have worked best in the past for organizations that operated in circumstances somewhat like yours?

-Which of these assumptions fit your organization's values and style?

-Which of these assumptions would be received enthusiastically by users of your offering, customers, employees, partners, suppliers, shareholders, lenders, and the communities you serve?