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Enhancing Organizational Performance

Psychic Wins Multi-Millions in Lottery

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Everyone and their brother is out there trying to make predictions regarding what will happen in 2011. Will the economy improve, will jobs finally begin to appear, will various wars and conflicts resolve themselves, will I get a promotion, will gasoline prices go up or down, what about the stock market, will Elvis put in an appearance, will I win the lottery, etc.?

“Psychic wins multi-millions in lottery.” I am quite certain I have never seen a headline like that. Have you? So if you were truly psychic would you waste your time doing card tricks in a lab, or spend time predicting another’s future on some side street in a second floor walkup shop or would you go for the gold, so to speak? Why waste time providing services to others if you could truly predict what was going to happen?

Why are hawkers of get rich quick schemes not getting rich on their own schemes, but are getting rich by getting others to buy into their schemes? Was P.T. Barnum right? If I could truly buy foreclosed houses and sell them for tremendous profit, why aren’t you doing that yourself rather than trying to convince me to give you my money for your secret to success?

If genius stock brokers are so good at making money, why do they need my money? Why is it not a full time job just managing all the gobs of money they are making for themselves?

I was doing work for a large Fortune 50 company. They had assembled a cross section of consulting firms to tackle an issue they wanted researched and resolved and I was invited to participate. One of the other consulting firms kept vigorously pressing their solution as the one that would resolve all of the client’s business issues, all they had to do was adopt it and pay them a lot of money. Success was guaranteed. The very large and extremely well known firm that was so strongly promoting their concepts was on the verge of bankruptcy at the time. I had to ask, in as gentle way as I could, why weren’t they employing their own magical solution in order to save their own company. I mean if it was good enough for their clients why aren’t they taking their own medicine?

As a teaching assistant in grad school, I had a question posed to me about Nostradamus that has bothered me enough that 30 years later I still remember it. A freshman student asked me if I believed in the teachings of Nostradamus. I immediately responded in the negative without giving it much thought. I knew who Nostradamus was, but my tendency was to dismiss such nonsense out of hand – it was not something I wasted time upon. The student then followed up with “Have you ever read Nostradamus”? I had to answer that “No, I hadn’t.” (I also have not read Scooby Doo or Josie and the Pussycats). Then came the obvious next line – then how can you dismiss it?  I needed to have a more thoughtful reply rather than simply dismissing what to this student was a real belief. I am still kicking myself for not having a better reply handy with perhaps some facts and figures. The issue is that you can’t possibly have facts and figures at hand to reject every charlatan’s claim as there are simply too many charlatans with false claims out there. In order to deal with the flood of claims you need to develop your own heuristics that allow you to evaluate the claims one at a time in a logical fashion.

The bottom line though is that if these kinds of approaches did not work with at least some regularity with people and organizations they would no longer be used. The fact that they are not that hard to find in our day-to-day world means that they do in fact work often enough that the perpetrators of these solutions/hoaxes continue to use them.

There are a few factors that make us susceptible to these come-ons including a human’s tendency towards biases, such as confirmatory bias (accepting only information that confirms your existing beliefs and rejecting information that does not), the bandwagon effect (a desire to go along with the crowd, to fit in by believing what others believe). There is even a bias that you have, which makes you assume that you are less biased than others (well of course you don’t have that bias, only others), along with a host of others. There is also a human tendency to assume intelligent cause of an action. So that noise in the woods is more likely to be assumed to be a bear rather than just the wind, which has obvious survival benefits. And the human tendency to want to believe in higher powers, that someone at the top of the organization (no matter the size) knows what they are doing, can give the fortitude to persevere in the face of adversity. Of course each and every bias which developed because of its survival benefits also has a downside, and can make us susceptible to manipulation by others.

Any researcher, who regularly peers into datasets to read the evidence of what is contained within, must remain cognizant of the potential biasing and other factors that can cause misinterpretation of the evidence at hand. Any decision maker who understands the factors that can influence their decisions, is on a path towards making better decisions. And any person who can evaluate information coming at them from a evidence-based basis is more likely to steer clear of charlatans. Try this next time you walk into a psychic’s shop. When the proprietor asks you what they can do for you, ask them why they don’t already know.

© 2010 by Jeffrey M. Saltzman. All rights reserved.

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  1. The response to this posting has been enormous, to the point where I don’t think I will be able to respond to each and every comment or note I have received. But a number of people have sent me links that further explore the premise of the piece and here are a few of the best. Jeff

    Jeffrey M. Saltzman

    January 23, 2011 at 3:43 pm

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