This morning while driving into work I listened to an interesting discussion on CBC’s The Current on whether we were in a double-dip recession and what the pundits were predicting for the coming year.
The people speaking were two Bay Street (aka Wall St for the Americans) financial gurus as well as the Canadian Finance Minister who was fresh from the G8/G20 meetings. All three spewed forth a variety of numbers and statistics to make the case that yup we were experiencing the start of a double-dip recession and that growth would be muted going forward for the next year. For the average Joe (like me) listening, it was clearly time to batten down the hatches, stop spending and man the battlements, we were in for it. As I sat at a red light listening to the discussion it amazed me how the pundits were trapped in their predictions. They had no other way to look at things despite the interviewer’s questions and counter arguments.
So what do I mean by trapped in their predictions? We all interpret things and situations based on our experiences, built up over the years. Sometimes the interpretation is cultural in nature, sometimes it’s based on a direct experience and sometimes it’s based on the collective pressures of a group (group think).
Too often however people get trapped into looking only for supporting information that validates their approach or their idea. As a result they often ignore facts, outside influences and possible developments that could affect the ultimate outcome.
We see this all the time in our sales cycle, when we put in systems and when we provide support. The reality is that when people have an expectation in their mind they filter out incoming information that differs from their point of view and pick out only the information that supports their idea. People do this subconsciously without even knowing they are doing it and the get into trouble because of it.
So what is the impact of getting trapped? Let’s put it in the context of what I heard this morning – we are at the start of a double-dip recession.
- assuming job numbers are stagnant based on one month’s numbers
- assuming economic stimulus will stop based on the statements of some G8 and G20 leaders
- assuming consumer spending in North America will slow down because it did last month
These three assumptions (there were others) were indicators that we were at the beginning of a double dip recession.
I am sure we can all find examples of decisions that were made because of bad information, assumptions that were false and ignoring conflicting information. What I heard this morning made me think wow, here we have 3 people, people with credibility, making statements that ultimately affect us all, and at the end of the day they could be wrong in their interpretation! More worrying was that they were making statements and predictions based on one month of numbers! One of the gurus even mentioned this point. So although these people are individuals there clearly was a little bit of groupthink going on.
So what are some of the traps we see in our business? Well I have highlighted them in a recent blog article titled the 10 things you should consider when buying an integrated EDI system. The link to that article is below.
Each one of these 10 points are traps we have seen people fall into. I can probably add more if I wanted to, but these are the most obvious ones. Why do people fall into these traps? Well, very simply because they have already made up their minds on their approach and they filter out information that may change their perspective. Sometimes it is because the approach you are proposing is outside the realm of their experience and sometimes the pressure of groupthink makes them go in the direction of the group. Sometimes it is because they just want the issue to go away and become lazy in their decisions.
So how do you not fall into the trap? I always tell people to stand back and take a hard look at the assumptions you are basing your decisions and predictions on. You may be surprised what you find and uncover!