Do You State Reasons For Your Decisions?
Over the years having helped a great number of organizations with their decision making, we have made a rather startling discovery: a great many people struggle with giving reasons for their decisions. A decision might be discussed and argued over in minute detail beforehand but afterwards many draw blank when asked why they ended up making the decision they made. Now, this naturally does not mean the decision is made out of thin air. No, the reasoning for the decision might be rock-solid; people simply find it difficult to reason for it ex post.
There are a number of arguments going for explicitly stating your reasoning behind a decision. First of all, it is important to document the thought-process in detail so when you later come back to evaluate the soundness of your decision you have at least a faint memory of why you went about it the way you did. It is also extremely educational and provokes you to think in detail about the ”knowns” and ”known unknowns” at stake. If you find you do not have enough logical arguments going for your decisions, then you may cancel it and think it through a second time.
The 101 of argumentation
In philosophy, we can separate four distinct modes of reasoning: deductive, inductive, analogical and abductive. Having a passing knowledge of these gives good grounds for improving your reasoning.
Deductive reasoning follows from the truth value of the premises. For example with premises 1) ”All men are mortal” and 2) ”Socrates is man” it indubitably follows that Socrates, too, is mortal. Deductive reasoning does not properly fit in the business world full of risks and uncertainties. There simply is no clear cut logical reasoning that says ”increasing marketing budget leads to more sales”. It might, it might not. However, being aware of the basics of deductive reasoning might allow you to spot some of the most clearly faulty thought-processes. It is always good practice to ponder your premises and whether your conclusion might follow from them.
Inductive reasoning is based on past observations and probabilities. In inductive reasoning, premises give some indication of the truth value of conclusion, yet unlike in deductive reasoning don’t make it certain. A classic example is the case of black swan. Europeans had always only observed swans that were white in color so there was a lot of weight for the conclusion ”all swans are white”. That is, until Europeans sailed to Australia and found a species of swans that were black. Inductive reasoning is closely related to leading with data as the more and better quality your data is, the more likely the conclusions you draw from it are true. Using inductive reasoning you can give a rough estimate of how likely your sales will go up as your marketing budget goes up. Just make sure to prepare for the black swan.
Analogical reasoning, as name suggests, is based on analogies. It is used to draw a evidence from a case similar to yours. Your premises might be 1) your rival A increased their sales budget which led to increased sales 2) we are doing business and marketing in similar fashion and based on that you might conclude that if you increase your sales budget, you too will increase sales. Analogical reasoning can therefore be seen as a weaker form of inductive reasoning where the number of prior cases forming your premise is much lower and reasoning is comparative rather than statistical. Analogical reasoning probably should be avoided but at times it might be your only possibility and is better than nothing.
While our three prior modes of reasoning followed a pattern where a conclusion is derived from a set of premises, abductive reasoning reverses the order. It starts with an observation, to which the most likely explanation is sought for. For example we can observe that our sales have gone up and then, after researching the likely causes, assume that our increased marketing budget is the culprit. Abductive reasoning is a necessarily post-hoc activity. However, used in conjunction with analogical reasoning, you can use it to justify your new decisions. It is also a healthy activity to return to your decisions a few months after the fact to evaluate them. Then you can ponder whether the observed outcome is likely caused by the factors pondered at the time of decision-making.
This blog is merely scratching the vast surface of reasoning and argumentation, the latter of which we did not even cover. Hopefully this has managed to highlight the importance of logically sound reasoning for decisions and given you some tools to go about doing it.
Fingertip is a perfect tool for putting all this into practice as the software encourages you to state your reasons for the decision you have arrived to and documents all the necessary information that was available at the time.
Lasse Winter is the leading Data Scientist at Fingertip with a background in social sciences and a specific interest in text analytics. He is passionate about gaining exciting insights from data. During his free time Lasse loves sports and reading, with a specific passion for football.
Read Lasse’s scientific blog series:
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Fingertip is an online decision-focused business management solution designed to substantially improve efficiency, effectiveness, and empowerment in large complex organizations in the digital age.