The Problem of Prognostication

I’m sure we’ve all heard various misattributed sayings about the challenges of making predictions.

I’m a big believer in the uncertainty of future events – be they black swans, outputs of inherently chaotic systems, products of complexity, vagaries of humanity, etc. That’s one reason why my past reading includes books about managing uncertainty (e.g., Obliquity – Why Our Goals are Best Achieved Indirectly), analyzing complex issues to gain decision advantage (e.g., The HEAD Game – High Efficiency Analytic Decision-Making and the Art of Solving Complex Problems Quickly), the role of luck in success (e.g., Success and Luck – Good Fortune and the Myth of Meritocracy), and so on.

Near the end of Superforecasting, there’s a terrific example that really illustrates the futility of trying to perfectly predict the future: a memo sent by Donald Rumsfeld to George W. Bush and Dick Cheney, that references the insights of Lin Wells.

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Posted in Leadership

The Ambiguity of…Numbers?

Researchers have shown people who use “50%” or “fifty-fifty” often do not mean it literally. They mean “I’m not sure” or “it’s uncertain” – or more simply “maybe.”

Previously, I wrote about The Ambiguity of Language. Words are fuzzy, their meaning is fuzzy, everything’s fuzzy, alright?

But surely numbers – those precise friends who help us with all manner of things – are immune from ambiguity?

Well…once you throw people into the mix, things get a little fuzzy once again.

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Posted in Marketing, Everything, Books

The Ambiguity of Language

“Kent was floored. A phrase that looked informative was so vague as to be almost useless. Or perhaps it was worse than useless, as it had created dangerous misunderstandings.” – Superforecasting

In the early part of Superforecasting, the authors talk about the importance of being able to keep score of forecast accuracy. Only by keeping score can one close the feedback loop to assess forecasts (and forecasters) and calibrate predictive models.

But one thing that typically stymies such activities is the ambiguity of language. What does it mean when someone says there is a “fair chance” of something happening in the “near future”?

This topic has importance well beyond the realm of forecasting, of course, and I don’t think we (in general) recognize just how significant the implications are. We’re going through life thinking our words have specific meaning, and that they’re heard by others to mean what we intend, but is that really the case?

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Posted in Books, Leadership, Marketing

Book Report: The HEAD Game

the-head-game“The key message of this book is about how to manage tough decisions and piles of data by applying a few consistent guiding principles. The short version is simple: there is a better way to sort through life’s questions than simply sitting down with the loads of available information and treating every decision as a unique process without guidelines that help bring order to chaos. Amassing more and more data often isn’t the answer. Figuring out how to make sense of hard questions efficiently is: we want High Efficiency Analytic Decision-making, or HEAD, not a data dump.” (The HEAD Game)

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Posted in Books, Everything, Leadership, Management

The Scourge of Confirmation Bias

“Scientists are trained to be cautious. They know that no matter how tempting it is to anoint a pet hypothesis as The Truth, alternative explanations must get a hearing. And they must seriously consider the possibility that their initial hunch is wrong.” – Philip E Tetlock and Dan Gardner

Here’s a little exercise: I’ll give you a sequence of three numbers, and I want you to figure out the rules that govern that sequence: 2, 4, 6.

You’ve probably already figured out something that works.

Now what if I gave you the option to test your solution by providing me with sequences of three numbers, and I’d tell you if they were or were not valid?

Think for a minute about some sequences you’d provide.

Now consider that even if I allowed you unlimited test triplets, odds are that only about one in ten people would actually correctly determine the rules that govern the original sequence I provided.

Why? Because of a powerful, destructive, and widespread cognitive bias.

In this post, I’ll expand upon the example above, and I’ll explain why understanding confirmation bias (and knowing how to defend against it) is so damned important in many walks of life.

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Posted in Books, Leadership, Math and Science

Using the Charity Proposition to Improve Analysis

“Listen to them, without reference to your own views, for elements of their analytic position that make sense to you. Is it possible that every single thing they say – those who oppose you – is wrong? Or are there bits and pieces of their assessment that either align with what you think or represent some point of view that you hadn’t considered?”

How many of us have had our time wasted in meetings just hearing people state and restate and argue and re-argue their different points of view regarding a complex issue, over and over again? To each person, the complex issue is remarkably simple and has a clear answer – they just can’t agree on what that answer is.

A recurring message in Philip Mudd’s The HEAD Game – High Efficiency Analytic Decision-Making and the Art of Solving Complex Problems Quickly is that you should front-load your analytic exercise by taking the effort to make sure you’re asking the right questions to begin with, and that you’re consciously considering unknowns, assumptions, biases, etc.

One exercise that can help to uncover assumptions – leading to more efficient analysis and an escape from the assumption trap – is to consider opposing views, in what Mudd calls the “charity proposition”. The goal of this exercise is to identify and challenge our analytic assumptions, giving us the opportunity to address those ones that may prove unfounded, while quickly identifying areas of agreement.

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Book Report: Deep Thinking

kasparov-deep-thinking-cover“Our attitude matters, and not because we can stop the march of technological prowess even if we wanted to, but because our perspective on disruption affects how well prepared for it we will be. There is plenty of room between the utopian and dystopian visions of the fully automated and artificially intelligent future we are heading into at rapidly increasing speed. Each of us has a choice to make: to embrace these new challenges, or to resist them. Will we help shape the future and set the terms of our relationship with new technology or will we let others force the terms on us?” (Deep Thinking)

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Posted in Books, Everything, Math and Science

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