I Already Have An Answer. Why Are You Bothering Me With This New Information?
Experience combined with methodology creates insight that can keep you from going down the wrong path
This Edition - How Experience Shapes Understanding
We use the words data, information, and knowledge interchangeably but they are not equivalent. We start with a comparison of today’s Chicago winter weather to days gone by, look at a client situation, and then list some tips you can use to protect yourself from seductive intuitive answers. Don’t miss it.
What comes to mind when you think about February in Chicago? Snow? Ice? Being attacked by freezing winds while hailing a cab on State Street? All the above? Why does Chicago have this reputation? If you are a traveler, it may be because you hopped on a plane in Los Angeles wearing a spring jacket and found the downtown Chicago “Hawk” wind good to its name as you froze standing on a corner praying for a warm cab. There really is no way to exaggerate how uncomfortable it is to be caught in that situation and if you have been through it, the memory can last a lifetime. Brrrr…..
Base image created by Dall-E with additions by Ed Paulson.
Chicago’s reputation may have been well deserved from past winters, but it doesn’t match current reality. This week in the Chicago area it will be in the mid-50s and sunny, with a chance of hitting 60! Warmer? No doubt. Strange? It all depends on the person you ask and their prior experiences.
QUESTION: What’s your most memorable Chicago winter story? Leave a comment to tell us about it. We feel your pain and would love to hear it.
I can tell the difference between those new to Chicago and those who have lived here for a while by how they react to the warmer February weather. Those newly arrived see the 60 degrees, change to a lighter coat, and move on without much thought. Those from Chicago appreciate the warmer weather but then add, “It’s sort of strange, isn’t it? It must be global warming.” This simple example demonstrates an important trait in the way that our amazing brain processes information and creates perceptions, and it is useful to understand how the process works to protect yourself when making major business decisions.
We throw around terms like data, information, and knowledge like they mean the same things, but they are different. Data is a standalone fact of some kind, like the temperature, someone’s weight, or their age. An example of weather data would be a thermometer reading of 55 degrees Fahrenheit on a given date. Data becomes information when it is compared to something else. For example, today’s February 5th reading of 55-degrees Fahrenheit gains meaning when compared to the 10-degree temperature reading on the same date last year. The difference between the two gives us the information that today is 45 degrees warmer than last year! Is that a lot? This is where experience comes into play. It is the experience of having stood outside in 10 degrees and 55 degrees that tells us that 45 degrees is a BIG difference.
Data is a standalone fact that becomes information when compared to something else. Information becomes knowledge when processed by an experienced person who can determine its significance. This is why human experience matters and is not easily replaced by AI.
An experienced Chicagoan’s brain knows that this is a big difference and that it is strange to have so many 50+ degree February days in a row. To understand it the brain looks for a reason. Remember, our brains don’t like uncertainty and are always looking for simple, intuitive answers to questions. Attributing the warmer temperatures to Global Warming is a quick, simple answer and that is the one that almost everyone brings up.
This is where education and professional experience become important, especially when making consequential decisions. Analysis is needed to determine if our intuition is right or is it just a fluke of nature.
The methodical approaches typically used by professionals are designed to manage our natural tendency to accept simplistic answers and instead looks for facts and information that, when analyzed, will either support or refute our intuition.
Let’s take a look at a real-world example of how this interplay affected a former client. He was an intelligent man who founded and ran a successful service business selling and installing after-market devices in cars for dealerships. The business was historically profitable and ran smoothly. A few years previously, he opportunistically opened a cellular phone retail storefront to take advantage of his busy street location. Managing the retail part of his business took up a lot of his time and mental energy. He brought me on as a consultant because he was working very long hours and not seeing the financial rewards he expected. Plus, he wasn’t having any fun at work and was starting to wonder if it was all worth it. His perception was that the overall business was in trouble and asked me to give him a reality check, so he took advantage of my “Business Health Checkup” service.
After reviewing his operation and financials I realized that he was spending most of his time handling irate cellphone customers who demanded immediate service at a discount or they would take their business elsewhere. These often heated discussions were disruptive, emotionally draining, and the major reason he wasn’t enjoying his work. The commercial side, on the other hand, was profitable and had loyal customers who were satisfied with his company’s products and services.
In other words, he was struggling with the stresses caused by negative customer interactions from the marginally profitable cellphone side and seeing low profits. The combination biased his beliefs about the overall business viability. In reality, the rest of the business was operationally and financially healthy, and I explained this to him. My suggestion: Close the retail cellphone side and focus on the commercial side.
His first reaction was that he couldn’t do that because, in his mind, that was an important part of his business. After I walked him through the analysis he saw that what he perceived as important was, in reality, a drain on his time, focus, and energy, and was undermining the profitable commercial side. I contended that if he focused on growing the commercial side he would quickly make up the slim profit that the cellphone business provided, with less hassle, and have more fun along the way. His emotions were telling him one thing, but the numbers I presented were telling him something else. Fortunately, he believed the analysis enough to shut down the cellphone operation. Happily, for everyone, it turned out to be a good move all around.
We can bring this example back to the earlier discussion about data, information, and knowledge in this way. He knew that he was working many hours and wasn’t seeing the cash that he expected (two highly visible data points), and he assumed that his overall business was in trouble. Much to his credit, he took the step to have me check it out.
When I looked at the current sales and operation efficiencies and compared them to the past few years we got trend information. From that I saw that the commercial sales had remained steady with consistent margins over the years and the cellphone side was consuming a lot of cash reserves and personal time but adding little profit. The trend data processed through my experience gave me the knowledge to see that the cellphone side of his business was the problem and suggested that he close it. I recall visiting him a few weeks after he made the changes and he was more relaxed, joking, and commented that he was having fun at work again.
Interestingly, he really enjoyed reconnecting with his established commercial customers who were all happy to hear from him and curious where he had been! (There is a lesson here too if you are not keeping in regular touch with your major customers.)
He told me that he had not realized how little time he was spending with his loyal customer and that new business was already coming in directly from the discussions. It’s nice to have a happy ending!
Consider these steps in the future:
When faced with a problem, ask yourself what data are you seeing that tells you that you have a problem? I call these symptoms.
What is it about the data, when compared to something else, that makes you think that a problem may exist?
Who in your organization, or that you know, has the experience to analyze the information to determine its significance?
Then apply the concepts from last week’s post (January 29, 2024) to start looking for a possible solution.
None of us is perfect, and nobody can predict the future with absolute certainty. Using these steps before making major decisions will help ensure you are making the best possible decisions that reflect the best blend of your intuition backed up (or not) by objective information analysis.
#DecisionMaking, #Data, #Information, #Chicago, #Winter
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