Testing Assumptions Can Result in Better Decisions

Testing Assumptions Can Result in Better Decisions

by | Sep 28, 2021 | Operations

We all know what happens when we assume… And yet, how many of our decisions are based on untested information and assumptions? Have you ever been told to wait an hour after eating before swimming or you’ll drown? Where did this information come from and why do we accept it to be true?

Comic about what happens when you make assumptions.

Bubbe-meise is a Yiddish term used to describe old wives’ tales. Some examples include: It’s bad luck to open an umbrella in the house. Eat all your food—there are starving children in Europe! Chicken soup will cure anything!

In general, we tend to accept beliefs, data, news, teachers etc. as valid. Even putting aside lies, probabilities, bias, incompetence, etc., we accept a lot of bad information, assumptions, and suggestions. Why is this?

We need to question more, check resources, and test assumptions in order to make better decisions.

Cartoon with child telling storyteller: "This fact-checking site says no cow has ever jumped over the moon."
Frank and Ernest Comic

Perceptions and inherent patterns can also cause inadvertent actions. Recently, social scientists have focused on how we make seemingly obvious decisions. The results show most people tend to be risk adverse, avoid change, and accept the most comfortable alternatives. So, while we can work to change a bad decision at any time, we frequently avoid, delay, or defer change and, thus, draw out a negative situation. For example:

  • Denying the effectiveness of COVID vaccines is just unexplainable. For years, we have accepted seat belts, polio and various other vaccines, not driving while drunk, and many other safety measures. The vaccines are just a similar precaution to save lives.
  • Many economic proposals ignore that the k economy is getting even more evident. The k economy argues that economic recovery is experiencing different rates among the poor and the affluent. Specifically, the poor are experiencing even more problems while working class and the rich especially are experiencing exponential gains. Excluding this information is irresponsible and will only produce inaccurate conclusions.  
  • Discussions about returning to work and school are frequently based on personal opinions and biases. Why can’t we recognize we lack perfect information and rely on and test the knowledge we have?  

The solutions to these issues are not simple or obvious. However, we can pay more attention to alternatives, successful examples, and valid data while focusing less on personal opinions and bias. In particular, we need to include the parameters and process in our deliberations. Other helpful strategies include:

  • Get the politics of the issues out of the discussions. How many poor decisions are made because we think that’s what the boss wants? Or because “that’s the way it’s always done?” Or because we’re afraid to speak up? Or because we refuse to acknowledge that the situation has changed? Drop the ego and make fact-based decisions.
  • Utilize analytics. This is an incredible tool for improving success, developing alternatives, and measuring outcomes. However, analytics can be less reliable when the data is wrong, we assume invalid relationships, sampling is inappropriate, and risk is not considered.
  • Review and evaluate processes and decisions. It is unreal to me that objective testing mostly outperforms personal interviews in staffing decisions. But, the reason is mostly because of poor training and bias.
"Did you fact check this before reposting it?" (response) "I don't need to. It agrees with my preconceived view and biases, so it must be true!"
  • Stop using old or incorrect data. We need to check that our sources are correct and up-to-date. The pandemic has significantly affected data and trends using 2020 information. The census shows some dramatic changes in the population—in particular, we need to consider diversity. For example, different regions have significantly different ethnic characteristics.
  • Don’t ignore facts and tradeoffs. Going back to the office has many tradeoffs such as commuting time and communication among employees. We need to understand the issues, develop flexible solutions, and test various alternatives rather than relying on personal preferences of people.
  •  Consider the conditions of a situation. Facts are frequently more independent than we think. If you flip a fair coin, the odds are still 50-50 (regardless of the last few flips because the flips are independent). However, sports analysts have proven that certain conditions, like left-handed batters hitting to right field, are more probable.
"The most misleading assumptions are the ones you don't even know you're making." - Douglas Adams
  • Don’t assume cause and effect. We frequently jump to conclusions before doing a proper analysis. Differing and multiple goals (such as short-term and long-term) can impact the understanding of cause and effect. Medical symptoms are often incorrectly diagnosed because a correlation was detected, which could be mere coincidence. Too often, an assumption is made and a diagnosis is given before things like environment, heredity, or psychological factors are even taken into consideration.
  • Check your biases. The biggest issue is probably bias, which is most evident in political and economic arguments. Questions like: Why are the poor are poor? What is the impact of IQ? How will the stock market perform? What are the causes of crime? These types of questions all involve a complex analysis of a variety of factors. And yet, everyone seems to chime in with an unchecked, biased opinion.

Bias is one of the greatest complications when it comes to accuracy in the scientific analysis of decisions. This includes statistical problems like sampling, measurement, and development of information. I also believe that social bias can be more impactful than statistical bias—this includes our preconceived perceptions and assumptions about factors affecting decisions. Cultural and environmental factors also affect bias.

Cartoon with Cat telling growling dog: "Have you considered unconscious bias training?"

Analytics, tradition, and experience are all valuable tools that help improve decision-making. However, we need to ensure that the assumptions behind those tools are accurate and reliable. In particular, our rapidly changing environment (especially in regard to issues like COVID) requires regular testing and validation. Similarly, creativity and intuition that defy some analyses are becoming increasingly necessary. Search alternative causes and solutions, test your assumptions, and always ask yourself: Why do I believe what I believe? How do I know my information is correct?

Dr. Bert Shlensky, President of www.startupconnection.net, offers experience, skills, and a team devoted to developing and executing winning strategies. This combination has been the key to client success. We welcome comments, suggestions, and questions. You can write him at: bshlensky@startupconnection.net  or call at 914-632-6977

Make Better Decisions: Incorporate Operations

by | Jun 19, 2019 | Operations

“Who’s in charge here?” A question frequently asked when things go wrong. We want answers when bad decisions lead us to less than ideal outcomes! We demand to know where blame should be placed for any negative situation we find ourselves in! And we tend to assume that all decisions are made at the top level—and, too often, they are. And that’s the problem. Because the best decisions usually include operational features. Learn to make better decisions.

It’s a common misconception that the smartest, most capable members of an organization are at the top, “running the show.” But, that’s naïve thinking because a majority of us have been that employee dealing with an incompetent boss, right? Successful businesses (and governments) have learned that infrastructure, support, and teamwork are integral to effective decision-making. This is why leaders have advisors and the reason many companies utilize think tanks to make better decisions. Sure, there’s often a need for a strong “all-star” to be the face of a business or team, but organizations are finally acknowledging that operations are the glue holding everything together and communication between all levels is imperative.

With that in mind, it’s easy to see why the current trend shows that operations and analytics are critical components of marketing and planning. Additionally, automation, technology, customer needs, and the sharing economy are becoming vital components of the branding and marketing process. Some examples include:  

  • Internet sales. In the beginning, delivery and security were thought to be major obstacles. Today, quality customer service, heightened cybersecurity, and speedy delivery have become virtually standard. Additionally, the elimination of several processing stages (like those used in brick and mortar stores) can dramatically reduce costs and prices.
  • Innovative marketing strategies. Creativity, differentiation, and advertising have always been the focus of traditional marketing and branding approaches. However, factors like value, service, quality, and culture are producing better results. The evidence is clear if you compare how brands in department stores target their customers versus the way Amazon and other leading online stores interact with users.

So how do you utilize operations to make better decisions?

  • “All-inclusive” business structures. Companies are learning to value expertise and experience over the obsolete hierarchy system. Phrases like, “We have always done it this way,” and, “Because I’m the boss,” simply need to be replaced with a commitment to searching alternative options to find the best solutions.
  • Integrate Functions. For example, an organization’s Customer Service department is frequently owned by the contact center (voice, chat, email), while a marketing team manages its social media. There’s a silo that needs to be broken down with this relationship in order to keep everyone on the same page and maintain communication between departments.
  • Critical Analysis. More attention needs to be placed on analytics, review, and alternative approaches. In particular, risk, probability, and goals need to be taken into consideration as a critical part of problem analysis and decision-making. An easy and free analysis tool is the Internet. Simply search Amazon or Google for a better understanding of your competition.  
  • Welcome failure. We view it as a “bad word,” but it’s part of Success. And an important one. Vince Lombardi got it right when he said, “If you aren’t making mistakes you aren’t trying hard enough.” After all, how many times did Thomas Edison fail before he succeeded?
  • Curb exorbitance. We all know the expression, “If at first you don’t succeed, try, try again.” And as the previous bullet point states, failure helps us learn. BUT, I do like to make a note that there it is necessary to maintain a balance between the encouragement of innovation and the critical analysis of what is and is not working. Stupid questions may not exist, but bad ideas do. And you need to have the tools and judgment to recognize when you’ve spent too much time or effort on something that isn’t worthwhile. A good decision can be as simple as: stop making the same bad one. 

While organizations and environments continue to become more complex and change at rapid speeds, it’s important to adjust your business plan to accommodate these transitions accordingly. Focusing more on Operations can improve the way your business functions, and allowing the decision making process to start at an operational level is an integral part of adapting a more efficient strategy. When decisions are inclusive, they’re more informed. And I think we can all agree that the more informed we are, the better equipped we are to make better decisions.

Dr. Bert Shlensky, president of Startup Connection (www.startupconection.net ) is a graduate of Sloan School of Management at M.I.T. He served as the president of WestPoint Pepperell’s apparel fabrics business as well as the President & CEO of Sure Fit Products. Having provided counseling to over 2,000 clients, his focus is on working with select startups and small businesses.

Contact Bert at:
914-632-6977 or  BShlensky@startupconnection.net