A Million Tweaks logo

A Million Tweaks marketing

(small marketing hints and tips that grow)

I hate to agree with Michael Gove, but ..

.. expert predictions, at least, are overrated.

"For a number of years, professors at Duke University conducted a survey in which the Chief Financial Officers of large corporations estimated the returns of the Standard & Poors index over the following year. They collected 11,600 such forecasts and found that the correlation between their estimates and the true value was slightly less than zero .. The truly bad news is that the CFOs did not appear to know that their forecasts were worthless " .. they set their confidence limits and were grossly overconfident.

"Completely certain" physicians about the diagnosis of an ICU patient were 40% wrong after post mortem.

This is our fault. We prefer confident experts over those who tell us their doubts.

"Experts who acknowledge the full extent of their ignorance may expect to be replaced by more confident competitors who are better able to gain the trust of their clients."

When the rubber hits the road, we want our experts to tell us what to do, not give us a range of options along with uncertainties.

Being overconfident leads to taking on more risk, not because risk-takers like risk, but because they are unaware of it.

Optimism, a different thing, is highly valued. So someone who is optimistic and confident can lead us all into a financial crisis.

Optimism brings with it resilience in the face of setbacks. Optimists take credit when it goes well, but are less keen to take blame when things go wrong.

So where do we go from here?

In the face of a confident expert, perhaps ask for an enumeration of the risks and be aware that you will be quite willing to believe your confident expert simply because of their confidence, and that confidence may be entirely unfounded. So if you feel differently, ignore your expert.

If you are an expert, it helps to be optimistic and fairly confident and if you are self aware, to keep separate your self criticism from your public face.

I've been advocating listening to your inner voice quite a lot lately. In the case of a confident expert, your inner voice is lying to you. Normally we would counter the subconscious with conscious evaluation using hard facts and a spreadsheet but I'm tempted to say that won't work either, since everyone is economic with the truth at interview. Just be aware that your expert may not know the risks they are asking you to take. That's for you to decide.

http://amzn.to/2uocqoI

back

Sign up for one-per-day marketing tips

I will always respect and protect your info, and there's an unsubscribe at the bottom of every email.