Never say "always": how sweeping generalizations can compromise your business
Conclusions about some can't be used to draw conclusions about all - even if the "some" constitutes a majority. Life is too complex to simplify into sweeping generalizations, and sweeping generalization bias can lead to bad decision making: it keeps you from fully understanding trade-offs and clearly seeing opportunities. Feeling more comfortable with the "gray" and being wary of the "black and white" may land you in a better place.
This past weekend, I listened to an episode of the Ted Radio Hour about what it takes to start a movement and keep it going. Some of it was about charismatic leaders – what they are, what makes them charismatic, and why these leaders are successful at compelling people to act.
I was intrigued because business leaders often strive for charisma. But by the time I was halfway through the show, I stopped caring what the show was about. It could have been about marshmallows or V-neck sweaters or Maseratis. I stopped caring because I was distracted by the fact that the experts being interviewed were describing charismatic leadership in terms of sweeping generalizations. Here is an example to show you what I mean:
A sweeping generalization: “Charismatic leaders make an impact because they are true believers in a cause.” This statement doesn’t come right out and say all charismatic leaders make an impact because they’re always true believers in a cause, but the “all” and “always” are implied.
Not a sweeping generalization: “Most charismatic leaders are true believers in a cause, and they make an impact if their beliefs largely align with those of their followers.” Here, we see conditions like most and if. It’s not black or white. It’s not all or nothing. It’s… well… more complicated.
We like sweeping generalizations. They make things easier and give us clear guidance on what to do. But sweeping generalizations also over-simplify, sometimes to our detriment, or at least to the point where we're not making good decisions because we don’t have a complete understanding of the trade-offs.
For example, business leaders who strive for charisma, who want to make an impact and move their people to action, may feel relieved to hear that charismatic leaders are great communicators. Here is a straightforward answer, something you can go out and do to get to where you want to be.
But what if business leaders are perceived as charismatic if they’re good communicators who communicate something that their audience already wants to hear? If this is true, then spending all your time and resources on improving your public speaking skills may not work. You may want to also spend some time learning everything you can about your audience, otherwise you may not be effective. (For evidence of how this plays out real time, just pay attention to what’s going on in politics right now.)
Generalizations can also pose problems when it comes to consumer insights. If you’re an online clothing retailer, and you get a market research report saying women over 50 don’t like buying clothes online, you might feel confident about the decision to avoid targeting women over 50.
But what if some women over 50 buy clothes online, and what if that proportion, though not constituting a majority, is large enough to matter to your business? And what if these women are less likely to buy clothes online when there isn't a generous return policy? If you want to win over this segment, and can easily offer no-hassle returns, then a barrier suddenly becomes an opportunity.
The condition is where you can often find actionable insights.
Someone once told me that her least favorite answer to a question was “it depends.” To her, “it depends” isn’t an answer because it doesn’t tell you anything. It’s a cop-out, a way of avoiding sticking your neck out.
I disagree. “It depends” is a fair answer because it’s accurate. The trick is to be clear about the conditions. You can't be wishy washy or vague about what "it" depends on. Know your stuff. Know what causes what, and how everything is related. Most things depend on something else. Very few things in life occur in a vacuum.
If you embrace a simpler explanation just because it’s simpler, your business decisions may not be optimal. This isn’t always the case: I mean, I would never say “all” or “always.”
Actually, I would, because I’m human and likely to fall for sweeping generalization bias. But as long as we stay aware of our tendency to generalize, we can correct for it more often than not, and hopefully before it does any harm.
#DecisionScience #fallacies #bias #generalizations #business #BusinessStrategy #ConsumerInsights