In contrast, relatively short-term political, social, and economic forces often have major influences on corporate decision-making. Indeed, there can be a great disparity between the rigorous benchmarks for checks and balances set by natural laws and those determined by human behaviors. In corporate decision-making, there is no equivalent of the ’scientist’s worst nightmare’. The focus is forward, hindsight is 20/20, and there is a badge for recovery from spectacular failure.

Often, clients, their stakeholders, and their competitors are interested in overarching outcomes under various scenarios. Sometimes, this high-level focus can foster the seepage of half-truths, falsehoods, and ignored data into business analysis.  Decision-making can deteriorate rapidly in the absence of a disciplined commitment to using the correct benchmark for each component being considered (e.g., facts vs. opinions). 

Here are a few recurring situations to be on guard for on the slippery slide to dressed-up guesswork: 

• There is a short time horizon and ramping up valuation or earnings is critical.
• The scope is signficantly constrained by politically viable options.
• Change in the status quo warrants much cultural and behavioral adaptation.
• The field includes sacrosanct intangibles, like entitlements and individual egos.

For example, an article in the October 2010 issue of O, The Oprah Magazine, advised that “knowing your vitamin D levels may save your life“.  This and similar media recommendations appear to have been widely heeded – last year approximately $50M was spent on screening Canadians’ vitamin D levels, a 40% annual increase.  Unfortunately, under a publicly funded healthcare system this is a colossal waste of money; screening the general population for vitamin D levels is unnecessary.  A fraction of $50M/year would provide safe and effective dietary supplementation for the entire population of at-risk and/or concerned Canadians, without risk or the need for testing.  A smaller fraction would cover the costs of sending the few who are truly vitamin D deficient, and who would clinically benefit from it, for a winter sunshine vacation!  Sadly, $50M/year that could have been better spent on a myriad of essential health care services was wasted:  Not because of a lack of understanding of the concept of subject matter expertise but rather, because of a systemic failure to apply that understanding.

We don’t have to look far to find examples where bona fide experts made disastrous mistakes, so scepticism about expert opinions is healthy.  However, when dealing with important issues, like stewardship over significant resources and personal lifestyle choices, one has a responsibility to know the difference between;

• the opinions of influential people with vested interests, and
• consensus recommendations based on critical analysis of evidence by people who truly have the training, expertise, and credentials to do so.

Reserving this level of due diligence for situations in which the impact of errors is instantaneous and catastrophic is not good enough.

To illustrate the slippery slope of insufficient attention to detail I like the example of a very professional sign that appeared in hundreds of washrooms on a large fleet of passenger ships:  “Frequent hand-washing reduces the risk of influenza and other gastro-intestinal diseases.”  While the intention was laudable, there was a critical error; the use of the word “other” implies that influenza is a gastro-intestinal disease, which of course it is not.  The fact that the error remained uncorrected for years suggests that of the hundreds of staff involved in ship operations, including quality control, health and safety, emergency procedures, and food services, no one caught the error or appreciated the urgency of correcting it.  Was this a minor oversight?  Or was it an indication of serious flaws in a system entrusted with the lives of thousands of passengers?  I don’t know, but the fact that one of the ships subsequently ran aground one night and sank may suggest the latter.

My point is that if your business involves things like investments, human and capital resources, the lives and health of people, and the justice system, then you need to think carefully about the risks of failing to pay appropriate attention to details.  How you do anything could well be (or appear to be) how you do everything.

The consequences of incorrectly associating titles and designations with personal attributes are much less amusing when considering the quality of information from a source whose name bears additional letters.  Such assessments are absolutely crucial in this, the age of information.  Ideally, a designation in the form of a prefix (e.g., Sir, or Prof.) or suffix (e.g., PhD, or FRS) should be a cogent and widely acknowledged indicator of the holder’s high honours, experience and expertise derived from decades of education and training, and/or adherence to stringent professional codes of conduct.  It may therefore be wise to hold in high regard relevant information derived from a source with an appropriate designation or title.

Unfortunately, the array of professional designations has exploded in recent decades, the quality of institutions granting them varies widely and, to make matters much worse, the holders of designations increasingly use them out of context.  The prefix “Dr.” is used by medical doctors, dentists, chiropractors, acupuncturists, veterinarians, opticians, naturopaths, and academics.  Degrees may be awarded by institutions ranging from widely recognized as being among elite schools, to relatively unknown entities.  Professional associations, complete with membership criteria, annual fees and appealing designations increasingly demand attention.  Designations may be used stringently by their holders (e.g., a physician who uses the “Dr.” title only while working in a clinical setting) or as palpable branding (e.g., an optician running for public office using “Dr.” on election campaign materials).

It is imperative that the consumer of expert opinions, recommendations, and reports thoroughly evaluate the reliability of the source.  If the informant uses titles and designations then asking the following may help determine if the attributes conveyed by the those extra letters are appropriate.

1) Is the designation or title being used to convey expertise that is relevant to the topic being considered?  Be rigorous:  Being honoured with two Nobel Prizes (for chemistry and peace) does not make the recipient an expert in human infectious diseases.  (Remember Vitamin C and the common cold?)

2) What institution or organization granted the designation and how is it objectively ranked?  Ignore self-ranking data and focus on independent evaluations by organizations with little vested interests in the outcomes.

3) What significance does the designation actually have?  Is it in a field recognized by prominent multidisciplinary centers of training/education? If not, ask why.

4) Is the title or degree designation being used as a marketing brand?  If so, is such use legitimate, or fraudulent?  If the latter, what does that say about the information itself?

5) What is the track record of the informant?  Is there bona fide evidence that the source, regardless of designations, is actually any good?

Strategic decision-making involves assessing a mix of inputs against the backdrop of reality.  Inputs include deeply held beliefs and hard facts.  While there is no text-book ideal mix, good outcomes are often fostered when the process includes honest attempts at determining where on the quality of evidence spectrum each piece of key information lies.  For starters, try asking the following of each criterion for decision-making:  Will the information and/or opinion withstand a rigorous test for being unbiased, objective, and credible?  Or do they support what you want to believe, or what others want you to believe?  Having these answers is essential if decision makers are to fulfill their fudiciary duties to their stakeholders.

Authenticity is becoming increasingly hard to nail down.  Factors for this range from powerful marketing, conflicting interests, political agendas, and just plain old illogical and confused thinking.  Before you accept ’supporting’ data, ask the following:  How do the data stand up to established yardsticks of scientific evidence?  Are the data complete, or selected to support a premature conclusion?  Are the data free of conflicting interests and other biases?  Is the source of the data credible? 

For a trained scientist, asking such questions seems redundant.  In my consultancy, however, I’m truly amazed by how often high-impact decisions are made without addressing the authenticity of supporting data.