Are You Letting Generative AI Fall Short of Its Full Potential?

Generative AI (GenAI) can produce impressive results, yet it's true potential is only realized when you guide it effectively. One way to do this is by applying the Socratic method of inquiry where you ask open-ended, probing questions that challenge assumptions and reasoning. As GenAI becomes increasingly integrated into decision-making for strategy, planning and execution, maximizing its value depends on how you engage with it. By using the Socratic method, you strengthen your critical thinking and improve the quality of responses received from GenAI.

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Cognitive Bias Can Influence Generative AI Output

GenAI outputs are heavily influenced by the way prompts are framed. If I’m not mindful my prompt can be shaped by confirmation bias—the tendency to seek information that supports existing beliefs—resulting in a response that is more likely to emphasize data or arguments aligned with my belief, while downplaying or omitting opposing viewpoints. This biased response can potentially limit consideration of alternative perspectives because of anchoring bias—the tendency to give excessive weight to the first piece of information received—resulting in poor decisions.

Let’s say I’m using GenAI to decide whether to expand my business into Asia. I believe this expansion is a good idea.

My prompt: "What are the benefits of expanding into Asia?" This phrasing assumes entering the new market will be beneficial, implicitly guiding GenAI to provide a response confirming my belief.?

GenAI response: “Expanding into the Asina market offers several key benefits including revenue growth, diversification of risk, and economies of scale.” With additional detail supporting the benefits.?

Limited analysis: The confirmation of my belief that expanding into the Asian market is a good idea, may limit my consideration of potential difficulties like regulatory issues, competition, or operational challenges.?

Cognitive biases are an inherent part of human decision-making, and they don’t disappear when we interact with GenAI. Let’s see how the Socratic method can help us mitigate their impact and improve the output from GenAI.

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Using the Socratic Method to Improve Generative AI Output?

The Socratic method is a technique that facilitates critical thinking using a series of questions that challenge people to examine their beliefs and opinions. Through this process, people are prompted to validate their assumptions, examine inconsistencies in logic, and consider multiple points of view. The questions act as a guide, helping people reflect on the reasons behind their beliefs and opinions.?

By applying the same principles of critical thinking and questioning you can guide GenAI to broaden your perspective, explore unconsidered points of view, and refine your understanding to improve your decision-making.?

Let’s see how this might work with the example of expanding into Asia.

Start with an open-ended, exploratory question: Begin the conversation by asking a broad question to initiate exploration.

What are the potential pros and cons of expanding from North America into Asia??

This invites a broader context rather than affirming a preconceived idea about benefits.

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Probe for justifications and assumptions: Once you receive an initial answer, challenge the reasoning behind the points presented.

What data exists to support your response that this market offers significant growth potential?

What data exists to support your response that adapting to local consumer preferences could be a challenge?

Are there assumptions being made about customer preferences and behavior that we should question??

This encourages the GenAI to reveal the underlying logic and any assumptions behind its initial response.?

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Ask for clarifications and additional details: Seek clarity on any generalized or vague responses to ensure a valid response.

You mentioned that the market has 'high demand.'

Are there specific data points supporting this claim?

What factors are driving this demand??

Clarifying details ensures you are working with specific, actionable insights.?

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Examine alternative points of view: Prompt the GenAI to consider multiple perspectives.

What potential market entry strategies could we pursue?

And what are the pros and cons of those strategies?

How might competitors respond to these strategies??

This allows for a broader examination of the situation and helps you make a more informed decision.

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Test for inconsistency and logic errors: Look for things like contradictions, circular logic, inconsistency with observed reality, and confusion between correlation and causation. ?

You said our product resonates well with consumers in America, so it will resonate well with consumers in Asia.

Yet you also said cultural differences, and social norms, can drastically affect how a product is received.?

How do you reconcile these two points??

This encourages the GenAI to provide a coherent and logical explanation.?

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Explore broader implications: Ask questions that explore the wider effects of entering the Asian market.?

If we enter this market, what might be the financial, operational, and reputational impacts both short and long term?

How might customers, employees, partners, and shareholders be affected in the short and long term?

What unintended consequences might result from expanding into Asia??

This broadens the analysis to assess a fuller range of consequences.

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Refine the Inquiry: As the discussion progresses, use more specific questions to dive deeper into areas of uncertainty or interest.?

Given the cultural differences that can affect how a product is received, what can we do to mitigate those risks?

How can we address the lack of local brand awareness and talent expertise?

How can we mitigate the risks that might arise from diverting resources from our core business to support this expansion??

This refines your understanding and helps develop practical strategies or conclusions.

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Getting the Most from Generative AI

Generative AI can produce impressive results, yet it's true potential is only realized when you guide it effectively. By using the Socratic method of inquiry, you challenge assumptions, broaden perspectives, and check for logic errors, enabling more objective and well-rounded decisions. This approach strengthens your critical thinking, improves the quality of responses received from GenAI, and safeguards against the cognitive biases that distort judgment and decision-making.

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