Data-based analyses are often turned into a story for easier understanding and adoption. But the stories are limiting the discussion to the average statistical effects.
Stories based on the average are often only valid for the average of the samples and might hide significant risks and nuances around an expected outcome.
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Stories can suggest a causal link when the link doesn't exist. For example, urban legends like the Sports Illustrated magazine state that individuals or teams who appear on the cover will subsequently experience bad luck.
Similarly, managers can form faulty beliefs about the effects of praise and punishment, especially when the performers they praise go on to perform worse and those they punish afterwards improve.
Stories based on the past can become outdated when situations change suddenly and drastically. Traditions built on them often persists long after.
Listening to captivating stories can lead to biased evaluations and irreversible mistakes in business.
When it comes to dealing with critical problems, it is useful to become a story sceptic.
A narrative created after a specific result often downplays alternative scenarios that could have happened, making success and failure seem more predictable than they are.
Outcomes that seem obvious in hindsight are often unknown at the time of the decision, such as the modern PC, Google, or Harry Potter, that expert investors initially rejected. Often, not even the owners can accurately predict their own potential.
The ability to create stories helps people to cooperate and move forward. Stories have multiple advantages: They allow us to discern complex situations, remember ideas, communicate with others, and make predictions about the future.
It is vital for managers and entrepreneurs to use these benefits and improve their storytelling skills. But stories can also be misleading. It is crucial to recognise the different ways stories can deceive you.
Some stories fail to see the existing relationship when causes and effects are separated by time. Stories can misinterpret investments that feature worse-before-better dynamics.
New leaders may receive acclaim or blame for results that happen right after their appointment even though it may be due to the previous administrations.
While success stories are motivating, they could lead to a false belief that success is more controllable and predictable than it is.
Stories often focus on the outcomes that can be seen while ignoring the underlying processes.
Stories can be misleading despite providing information.
The solution isn't to stop telling stories as they provide vital benefits. But astute decision-makers can take convincing narratives as theories to be scrutinized, rather than absolute truths.
Personal experience and notable events may be appealing but often tend to be unrepresentative.
In reality, the more unique the observation, the less likely it is to generalise. When dealing with complex decisions, many organisations now favour data-based algorithms over experience-based narratives.
Survivorship bias is a logical error that twists our understanding of the world and leads to a wrong understanding of cause and effect.
We fall into survivorship bias when we assume that success stories tell the entire story of a product/business, while we don't properly consider past failures.
Generating creative ideas is easy. Selling them to strangers is hard. The ability to sell an idea has as much to do with the seller's traits as the idea's inherent quality.
Judgments about the pitcher's ability to come up with workable ideas can interfere with the perception of the idea's worth. That means that when you're preparing to pitch your idea to strangers, your audience will put you in a box. And in less than 150 milliseconds.
Type 2 diabetes is a common condition where your body loses its ability to use up glucose in the blood, also known as blood sugar . There are a number of symptoms that can accompany type 2 diabetes — and many of them start to show up early.
The most common early signs of type 2 diabetes are frequent urination, extreme thirst, and persistent hunger. But there are other symptoms that may alert you to this disease. A diagnosis can feel life-changing, but types 2 diabetes is very manageable if caught early.