A quick guide to scientific thinking, for business people

Scientists should be open-minded but sceptical, or as the astronomer Carl Segan so beautifully put it.... open-minded but not so open-minded that your brains fall out.

There are other characteristics that are useful for scientists (eg creativity, attention to detail, perseverance) but in this short article I focus on open-mindedness & scepticism as important tools to correctly interpret business data and make better decisions.

Scepticism

The motto of the first club of scientists, The Royal Society, is nullius in verba. In spite of being in latin and sounding posh, it's actually quite a punk, anti-establishment slogan. It means don't accept anyone's word for something, even if the boss (or Institute director) says it.... it could be wrong. It's an exhortation to examine the evidence and logic for a claim, and to ignore "arguments from authority".

So scientific thinking means being wary of accepting claims made without supporting evidence and/or supporting logic.

Here are some examples that business people should be far more sceptical about:

• claims from media X that "research shows" that advertising in X is the most sales effective
• claims from consulting companies that highly successful companies are adopting X practice
• claims that a special proprietary metric reveals a brand's future market share, its ability to charge higher prices, and so on.
• any 'black box' research technique
• any "we can't show you the data because"... its confidential, proprietary, lost etc
• any single research study, even if it's published in a top academic journal

Professor Phil Rosensweig's book ""The Halo Effect and eight other delusions that deceive managers" is worth buying for the first chapter alone. It shows how so many claims of what drives business success are totally unreliable, made-up stories that simply reflect past performance eg if Apple is doing well today then everything it does is wise.

Open-mindedness

Everyone likes to think they are open-minded. But ask yourself, what's a strongly held view that you completely changed your mind about because of exposure to evidence and/or logic? We should all have no trouble listing many such instances. Hmm, it seems we are less open-minded than we think. We are rather resistant to changing our minds, or not inquisitive enough to seek out potentially challenging evidence.

It's important that we try harder to be open-minded because, as BBC science journalist Tony Edwards points out nearly every big, important scientific discovery has been a tremendous surprise, at least at first. Or as I like to say "the real world is a weird place", we just can't use our intuition to understand how millions of consumers behave, or why a particular brand sells as much as it does.

"The mythology of every race tells of cosmic beings who used the elements as their weapons, and that fantasy came dreadfully true at Hiroshima. The legendary beings of the past could travel in chariots without horses, speak to each other across the universe, make fire obey them, and cure diseases with their magical powers. We have automobiles, radio, aeroplanes, electricity, laser beams, miracle drugs and submarines. Our human ancestors would have regarded all such things as fantasies." - The encylopedia of things that never were, p.9, by Page & Ingpen 1987, Viking Penguin USA.

If we refused to counternance claims that clash with our intuition or the prevailing theory (e.g. what is taught in top business schools) we'd still think that the Earth is the centre of the Universe, that disease is caused by an imbalance in the humours, that every species of animal came into existence at the same time, that stress causes stomach ulcers, that reducing customer defection rates produces dramatic increases in profitability, that the NPS score predicts company growth.... the list could go on and on. Clearly much that was once thought unquestionably true was actually utterly wrong.

May you always be open-minded and sceptical. And curious.