How to Acknowledge Reality

Staying grounded in reality is not easy these days. We are bombarded with so much noise, misinformation and flashing news alerts. It’s easy to get distracted from what is truly important. Getting grounded in reality requires a very sound principle known as Critical Thinking. If more people would simply think in a critical way, they would break through the clutter and see the truth.

It all starts with listening to various viewpoints and asking questions. A good framework for asking questions is to cover the W’s and the How: Who, When, Where, Why and How. Your goal is to aggressively dissect the issue from various sources and through a series of questions you filter out what is false and retain what is true.  Take for example a small child who is always asking questions about how things work – they have a natural curiosity of seeking the truth. Decisions are deferred until you compile enough evidence to reach an objective and rational conclusion. The challenge is to remove your prejudice feelings and just like a child, remain open-minded, finding your way to the answer.

In order to reach a sound conclusion, you will have to apply reasoning. This typically takes two forms:

Deductive Reasoning (top down) and Inductive Reasoning (bottom up). Deductive reasoning is when you arrive at an answer and you decide to apply it. For example, you have concluded that nasal spray is a better way of treating your allergies as opposed to taking pills. When you get an allergy you try it and see if your deductive reasoning is correct. Inductive reasoning is the opposite – you are not sure why the problem is taking place and you try to identify the reasons. Perhaps you develop a list of things that could be causing your allergies. One by one you test and work through the list until you find the items that are causing the problem.

Reasoning is not easy. There are so many ways of getting derailed. Here are 18 areas to watch out for per The Thinker’s Guide to the Art of Strategic Thinking by Linda Elder and Richard Paul:

1.            Jumping to conclusions

2.            Failing to think about the implications of your decision

3.            Not staying focused on the goal or objective, wandering off

4.            Not grounded in the reality of your current situation, too idealistic

5.            Not recognizing contradictions or evidence that says the opposite

6.            Asking vague questions or giving vague answers to questions – If you don’t know, just say so

7.            Reliance on information that is incomplete, inaccurate or not relevant

8.            Inferring something about the situation from your own experiences, but it doesn’t fit this particular situation

9.            Distorting information or evidence to advance an agenda

10.          Not recognizing your assumptions

11.          Spending too much time on things that are minor or insignificant to the decision

12.          Not aware of your own bias or short comings

13.          Unable to communicate effectively

14.          Improper use of words

15.          Key ideas were not recognized

16.          So called experts are not qualified or really experienced with the subject

17.          Over simplifying what is essentially very complicated

18.          Forming concepts that are too theoretical and not practical enough

If we leverage this list and distill it down, then it becomes important to follow a set of principles. These principles include:  

1.            Clarity – Remove the ambiguity to put focus on the problem. You can better understand a problem by comparing it to similar problems or re-phrasing the problem. 

2.            Accuracy – Don’t accept what someone tells you. Make sure it is true or false before accepting it. You want your decision to be based on accurate evidence. In some cases, you may have to validate it.

3.            Precision – It can help to be precise with statements. For example, by quantifying a statement you bring increased precision to what you are saying. For example, it is accurate to say: All human beings have a limited life span. It is more precise to say: Human beings have an average life span of 69 years. By providing more details, you become more precise. 

4.            Consistency – When you take a position, it should not be in conflict with known facts. Your decision should be consistent with the evidence that supports the decision. For example, Politicians are often criticized for making statements to one group and then changing the statement to fit another group. You need to be consistent in what it is you say or decide. 

5.            Relevance – You should focus on those things that are relevant to the decision. It is not unusual to spend excessive time on noise and other information that has nothing to do with your problem or issue. There should be a connection or relationship with the information that is under consideration regarding a decision. You also may have to consider the significance of the evidence to your problem. Some variables or factors are much more important than others.  

6.            Sound Evidence – Critical thinkers look for good evidence and ask: Why should I accept this? Examples of evidence include: Samples, Observations, Testimonials, Comparisons, Research, Experiences, Subject Matter Experts and Expert Witnesses.

7.            Good Reasoning – When you make a decision or take a position, you should have good reasoning behind the decision or position. Your thinking has support behind it based on observations and factual evidence.

8.            Depth – Your viewpoint, position or decision should speak to the problem or issue. It must be deep enough to explain it or possibly solve it. You sometimes may fall short of not going far enough. Perhaps your analysis was cursory and incomplete. You have to speak to the issue and not avoid it.

9.            Breadth – Critical thinkers consider various viewpoints. They seek to remove bias by considering other opinions. A wide net is cast in how a problem is viewed – we enlisted Engineers, Artist, Women, and others to uncover different perspectives.  

10.          Fairness – It is important to be fair to all sides. For example, if you spend all of your time listening to liberal viewpoints without listening to conservative viewpoints, then you are not being fair. You cannot let your own personal feelings or viewpoints cloud your decision. 

Finally, as you gain more experience and knowledge across a wide range of situations, you can start to act on intuition. This is the advanced level of decision making whereby you have mastered the principles described in this article. This requires a lot of experience with decision making across a wide range of situations. Two books that can help give you insights behind intuition are: Blink by Malcolm Gladwell and The Go Point: When It’s Time to Decide by Michael Useem.

Don't Go It Alone

More and more cities across the United States are recognizing how important it is to support new startups for growing the local economy. We now live in a great entrepreneurial age where people recognize they must control their own destiny and solve the world’s pressing problems. Unfortunately, many people seeking to start a business are not tapping into the wealth of resources available throughout the United States.

“Nearly four out of five small business owners admit that they have not taken full advantage of national and community resources dedicated to helping small businesses develop and grow.” – Survey Conducted by Fifth Third Bank

I Prefer to Deal with Facts

Today’s world is full of talking heads, all professing some degree of expertise across a wide range of issues. What seems to get lost is a solid understanding of the facts and how to deal with hard evidence in a meaningful way. Part of the problem is that facts are dry and boring, not very appealing to a mass audience thirsting for entertainment. And needless to say, many media sources fuel the problem by elevating extreme viewpoints to obtain ratings.

Hand Shakes vs. Lawyers

We live in a world where timely execution is critical. Obstacles and delays can be detrimental to many businesses in this fast paced changing world. What helps is when you can trust someone based on a handshake and get things done quickly before having to execute legal agreements. Yes, this may fly in the face of a more cautious and traditional view of business which advocates, get everything in writing and make sure you hire a lawyer. However, this traditional view of business is increasingly not grounded in the reality of how people need to get things done.  

Welcome to a World of Structural Change

It used to be economic change would run in cycles. We would experience periods of high inflation followed by tight monetary policy that led to an economic slow-down. Today, we have cheap money, no inflation and below average economic output that is continuous. Economists and the Federal Reserve are perplexed about a key question: Will we ever experience a full recovery? The answer is No – we are in an age of structural change where there are clear winners and losers. It’s like having an economic boom for some and a depression for others.    

Focus on the Process - Part 1 of 2

All businesses require processes for the creation of products and services. A process is a collection of activities that consumes resources and adds value to the consumer (in the form of products / services) with some form of benefit paid to the producer. Additionally, all processes have variation – in business we call this risk. As H. Edward Deming, pioneer in the field of quality management, points out – If you can better understand variation in a process, you can plan for it and do things to prevent it.

Organizing the Competitive Intelligence Effort

The development of strategies to compete is essential for the survival of every organization. Competition is increasing from everywhere, ranging from small startups to global companies leveraging resources in the shared economy. Understanding this external global environment is now part of how you must strategize. Competitive Intelligence (CI) is the process by which you collect and analyze information to understand the external environment. The product of Competitive Intelligence is knowledge that facilitates decision making, both strategic and operational. Therefore, CI is both a process and a product.

Managing Complexity

You Must Understand Crowds to Manage Complexity

With so much change and uncertainty before us, one way to throw out the noise and traditional viewpoints is to aggressively manage complexity. When you start to manage complexity, you immediately gain some control over the change and uncertainty that you feel you have no control over. For example, “complexity theory” recognizes that crowds are a big factor related to complexity. Knowing something about the psychology of the crowd can be important to how you manage complexity.

Why More Companies Should Consider OpEx over CapEx

The OpEx Approach Provides More Flexibility

Increasingly, businesses need to improve their focus by doing a few things exceptionally well as opposed to owning each and every long term investment. The level of in-house expertise required to support major investments simply does not exist within most companies. Couple this with the fact that we now live in a world driven by intellectual assets and not hard assets.

Countering Black Swans

Rare events can have profound implications

There is little doubt that we now live in a world of Black Swans – unexpected events that can suddenly change everything. The term “Black Swan” was coined by Nassim Nicholas Taleb in his landmark book: The Black Swan. Taleb argues that random unknown events now drive much of what happens in the world today and because of reckless thinking on the part of our institutions, coupled with global networks and complexity, we can all expect a lot more black swan events in the future. All you have to do is look back over the last ten or twenty years to see it – 9/11, Financial Crisis, and Turmoil in Egypt are all black swan events.