Max Kalehoff comments on an interesting story about our bias towards things that are false. Human beings have lousy memories, and what we want to be true often affects our perception more than facts and logic. This has serious implications for business decision making. For instance, consider the following:
Vedantam highlights other research, including from Virginia Polytechnic Institute, showing that hearing the same thing over and over again from one source can have the same effect as hearing that thing from many different people. By extension, people are not good at remembering which information came from credible sources, or that information came from the same untrustworthy source over and over again.
Why were some Web 2.0 concepts so popular in the recent past (like "wisdom of crowds") but are now barely mentioned? One reason could be that we were exposed to the same few sources talking them up, and a second tier of sources talking about those original sources. The effect is that it seems like everyone is on the wisdom of crowds bandwagon, when nothing could be further from the truth. The vast proliferation of blogs has led to enough junk thinking on the web that it becomes easy to fall prey to faddish thinking. When people who don't what they are talking about decide to talk nonetheless (and all chime in together), we begin to wonder if they see something that we don't, and trusting our own analysis becomes more difficult.
Jason Burby recently examined a similar line of thought when he asked if all this data we now have is causing a death of intuition for decision making. I'm not a believer that you should trust your gut – on the contrary, I nearly always trust data more than emotion. But my concern is that people make decisions on data they don't understand. I discussed this idea last weekend with my dad, as he lamented about the skills of newly minted engineers who rely a little too much on their tools. In most cases, that is fine. But that 5-10% of the time that the tool might be wrong could be dangerous, and if you don't have an intuitive sense of what an answer should be, you may not catch the error. That is why I still advocate doing things the hard way until you understand the core concepts.
Believing false things can be very bad for your business, so here is my advice on how to avoid getting caught in the trap.
1. Always be on guard against cognitive biases – that is the best way to prevent them.
2. Question your motives, and the motives of other decision makers. When someone presents data that happens to support their viewpoint, discount it a bit. And question whether or not you accept data points based on what you want to be true, instead of what really is.
3. Disconfim. Disconfirm. Disconfirm. Always ask yourself what piece of data would prove you wrong, and look for that data.
4. Seek out less popular inputs. Four or five years ago, I put a lot of value in blogs because they were renegade media. Now that blogs are popular and monetizable, they cater more to populism. Now I find myself seeking out books more often because it is one of the information sources few people turn to in this digital age.
One of my favorite Warren Buffett quotes is that "conventional wisdom is often long on convention and short on wisdom." Stay diligent in your fight against poor decision making, and you can make thinking one of your competitive advantages.