Tag Archives: Occam’s Razor

Logic Tree: Young Managing Director’s Dilemma

(This originally appeared at Globis.jp, in a series on critical thinking.)

Words: 1,298

A young managing director sat in the business class departure lounge staring out at the tarmac warming in the early morning light.  His laptop was open to the most recent financial report of his office. He had worked hard to improve the financial performance of his company and in the first year achieved record profits.  He had been very proud of that accomplishment and expected that in his second year he would lead the office to even greater success. Looking at the report it was clear that it had not happen. He was stunned. 

He had been out of the office for much of the first six months of the year, traveling overseas to meet with clients at their headquarters. He hadn’t time watch the numbers as closely as he did in his first year.  He knew his team was working well and he felt the CEO, who had been his advocate in the first year, would maintain the processes he had implemented throughout the company.  Still, the financials showed a steady erosion of profitability with expenses rising across all accounts.

What was wrong?

It is at times like these that a logic tree can prove useful.  The logic tree is a graphic representation of the systematic splitting of an issue into components. Beginning with broad categories and working to increasingly narrower categories, it eliminates all the relevant possibilities of an issue until a specific factor(s) is isolated that indicates that it may be the problem’s origin. Logic trees also help ensure that you have thought broadly enough that nothing has been overlooked.

With practice, creating a logic tree is less time consuming than not using one, but it’s not an oracle, divining the secrets of your business.  It is a simple tool that assists the user to follow a thorough, step-by-step analysis process. But it only tells you what you ask it to tell you.  Where you begin the logic tree determines much about what it will tell you: How you define the problem determines the questions you ask, and the questions you ask determine the answers you get.

For example, let’s ask, “How can I accumulate more wealth?” One person might first split the question into categories of  “reduce expenses” and “increase income.”  This person has assumed that he can reduce expenses as well as increase income and that these are the primary ways to increase his wealth.  Perhaps, another person will make the first split in the logic tree with “increase working hours” and “increase pay for working hours.” In this case, the person assumes that his expenses are already low enough and so focuses on increasing income, either through working more or being paid more.

In both cases the first split of the tree reflects how the user defines the problem — one person thinks of expenses and income, the other thinks of hours and pay. Neither is wrong, however, in both cases the person should be aware of the assumptions that are built into their logic tree. “Should be aware” is the key phrase here because often the person is not.  However, the logic tree, because of its graphical representation, facilitates that awareness — if not for the person making the tree — then for the colleague or friend who might look at it.

Back to question: “How can I accumulate more wealth?” Why not make the first split “Legally” and “Illegally”?  Selling a kidney, or robbing a bank will also allow you to increase your wealth – at least initially – by providing income beyond your current salary.  In fact, we could add that stealing food and gasoline will reduce your expenses. There are risks associated with both, of course, but there are risks with working too many hours and asking for a raise, too, though clearly less morally and physically dangerous.  The point here is not that you should consider illegal activities to increase your wealth, but that you should be aware of how you’ve limited the range of your question.  So when beginning a logic tree, take time to think about a broad range of possibilities, if you decide that they are not appropriate (you don’t want to do illegal things), then you can eliminate them.  The main thing is to broaden your thinking at the start of the logic tree. It can always be narrowed.

Some techniques that help broaden your thinking:

— Decide what it is you want to know. Then create a logic tree that answers the question.  Now, step back and broaden it by adding a split in the tree that would occur before the first split you made. If your first logic tree was based on “How can I lose weight?”  Broaden that by changing the question to “How can I live a healthier life?” Now “losing weight” is a later branch.

— Rephrase the question: “How can I accumulate more wealth?” can be changed to “How can I save more money?” or “How can I earn more money?” or even “How can I increase my disposable income?”  All these change the definition of the problem and the structure of your logic tree and, of course, what it will tell you.

— Lastly, and perhaps most useful, is to have your work reviewed by a colleague, a consultant, or anyone that gives you a fresh view.

Now, let’s return to our young managing director:

He took his seat on the airplane, waved away the offer of champagne by the flight attendant, and pulled a yellow legal pad from his briefcase. He made a list of what he thought were the key factors under the question, “What is causing the erosion of profit?”  He began a logic tree, but it didn’t feel right.  He tried another, “What is causing the steady increase in costs across all accounts?”  He worked on it for a while, the yen was holding steady, there were no significant changes outside the company to drive the prices up.  Was it an increase in labor hours? There was an increase, but only slight, definitely not enough to affect the company across all accounts. 

Finally, he circled variable expenses, but he didn’t have detailed information on these. He would have to ask the CEO.  He shook his head.  How could the other managers be so irresponsible and why was the CEO signing off on these sudden increases? Specifically, what were these costs? He made a note to arrange for a meeting with the CEO.  For now, he had more pressing matters – meetings with clients scheduled over the next three days.  He sighed and closed his eyes, and began reviewing the presentations that he would give.

Over the next several months the executive continued to travel.  He never had the full formal meeting with the CEO, who rescheduled repeatedly.  Instead, he made several pleading phone calls and followed-up with long emails regarding the rise in expenses. Finally, with profitability continuing to decline, he accepted another position and left the company.  Sometime later, he encountered one of his former team members on the street. He asked about the company.  The colleague shook his head and looked away. The CEO and two executives had to resign abruptly – there was suspicion that they had been using expenses to siphon money from the company. The young managing director’s jaw dropped. He had been looking directly at the problem, but had never considered it.

Looking back, we cannot say that defining the problem in broader terms would have led the executive to its source. The past provides clarity that the present almost never allows. We can say, however, that defining the problem narrowly did not help the executive at all.

 (The discussion of the logic tree was inspired by the work of Matthew Juniper, Cambridge University, http://www2.eng.cam.ac.uk/~mpj1001/MJ_teaching_pg.html)

Erroneous Assumptions

(This originally appeared at Globis.jp, in a series on critical thinking.)

Assume makes an ass out of you and me.

A high school baseball coach was the first person I ever heard say this. A teammate had thrown behind the runner – sending the ball to second base as the runner ran to third – an error that even a Little Leaguer would recognize.

The coach, red-faced and clenched teeth, but valiantly striving for patience, approached the player between innings: “The runner’s going to third, not second. Why in the world are you throwing the ball to second?”

“Coach, I assumed he would want to stop at second.”

The coach blinked for an instant – stunned, as if he’d been hit in the head. Then he let out a bellowing laugh and walked away shaking his head. He stopped at the far end of the bench. “You assumed he would want to stop at second? He’s playing baseball. He wants to run home just like everybody else. Son, let me tell you something: Assume makes an ass out of you and me, and don’t you forget it.”

Erroneous assumptions when exposed are often laughably foolish. Until then, they masquerade behind unquestioned respectability. Allow me to explain.

On a spring Sunday morning I ask my son, Andy, what he wants to do. We have time and weather with us. We are up early and the day full of possibilities.

He mimes riding a bicycle, “Bike riding.”

He’s an accomplished cyclist and so I offer as a destination Innokashira-koen, the big park near Kichijoji station. We’ve done the ride only once before so I know it will still be interesting to him. I’m concerned that it’s a long ride, following the Kandagawa canal, and he seems tired from the overnight visit to his aunt’s house, where he played a lot and slept little. But, I decide that we can take our time, stopping to play at the smaller parks along the way. If he proves too tired, we can turn back short of the destination and it will still be a pleasant ride. Soon, we are on our way, pedaling under the trees along the canal.

One of the first things we learn in critical thinking is how uncritical we are of our own assumptions. Perhaps, the most serious problem is that we have difficulty seeing that others don’t share our assumptions. We tend to think our audience understands us and that they can easily see our point of view point because it makes so much sense to us. When we receive an affirmitive answer to our position, we rarely check to confirm that the audience a) understands our idea, b) shares our assumptions about it, and c) is actually agreeing to what we proposed and not something else.

The first park we come to is in an older neighborhood and it seems that most of the children have grown up and moved away. Some areas in the park are even overgrown with grass. We play on a ship styled from concrete, but soon return to our bicycles. We ride on to a second park, a wide expanse sheltered by a giant ginko. The main attraction is a long slide with rollers, like a factory conveyer. We play a long time there. When we leave the sun is overhead and we can feel it.

As we continue along the canal, Andy begins to have trouble keeping my pace. Usually, it is the opposite. I ask several times if he feels good enough to continue and he insists that he does. We go on.

Assumptions help us to narrow our data into useful form. They make the cup we fill from the data firehouse, which, if left unconstrained, would overwhelm us. But assumptions can also be misleading, allowing us overlook important information. Too often we fail to ask why enough times because we like being quick with a decision as much as we like being right. Combine that with our inclination to assume that our audience shares our assumptions, and we have a potentially calamitous situation. We have no clue – or rather fail to note the clues — until it all is undone.

We stop at a third park — cool and dark, with a carp pond and a meandering stream. I watch Andy push his bicycle along the edge of the pond. The usual excitement in him just isn’t there. I buy a sports drink from a vending machine and he drinks some and brightens for a fleeting moment. Again, I ask if he’d like to turn back, and again he declines. We continue toward Innokashira, but the spirit of a forced march has descended on our excursion.

Soon, he lags far behind and then stops. I come back to him and offer the sports drink. He waves it away, “How much farther?”

We are still far from Mitakadai station. Beyond there the path widens into the park. We need to go back, or it will be a problem for him to return home. He begins to cry. I’m stunned. Why is it such a tragedy to turn back? It’s been a good ride. It’s been fun. Why in the world is he crying?

“I wanted to see the animals,” he says.

Animals — what animals? At that moment I’m as lost as my baseball coach had been. Animals?

When we are confronted by our erroneous assumptions, it often takes time to let them go. We don’t want to be wrong, let alone foolish. Sometimes, though, it takes just a few seconds because we may have suspected that we were wrong all along and it has become painfully clear.

Finally, I got it: Two weeks before on a school field trip, Andy had visited the zoo on the far side of Innokashira park. He had understood my offer to ride to the park as a ride to visit the zoo. He knew that he was tired when we started, but wanted to visit the zoo again. He wanted to show me the animals and tell me all the interesting things he had learned. Meanwhile, I had assumed that riding to Innokashira meant going there and turning around. Wasn’t it obvious? Of course, it was not.

I offer to take him the next weekend to visit the zoo – by train. He agrees. After a break at a convenience store, he gamely rides home.

How blithely we expect that we are understood and our assumptions are shared; that people know what we’re talking about especially when they agree with us. This is even truer for managers and team members under time pressure to execute. Sometimes, assume makes an ass out of you and me. Especially, me.

A Gut Feeling About Critical Thinking

Words: 571

(This originally appeared at Globis.jp, as the first in a series on critical thinking.)

Students don’t think. That’s easy for me to say, being a professor.

Neither do professors. That’s hard for me to say, being a professor.

More accurately, I should say, we don’t think enough. We might ponder a problem — even worry about it through an entire night.  It may haunt our day, making us edgy and preoccupied, but often we’re not really thinking about the problem in a useful way.  We don’t run through a complete process of defining the situation; finding the cause and which factors are most influential.  Even if we do apply critical thinking tools, we often stop once we’ve run through the process, without considering the alternatives or ramifications of our decisions.

We may think we are doing something like that, but usually we’re focusing on two or three key points based on our experience and our emotional preferences.  We rely on a handful of unstated assumptions that prejudice our interpretation of data, arriving at a decision based on what we want to do rather than what we should do. If our action is successful, it becomes a reference point for future decisions – a good luck charm that we refer to when making other decisions. (I got that right, so maybe I know what I’m doing.)   If we are not successful, we curse our luck and try something else because we know that eventually we’ll be able to solve the problem. (This is try-and-try-again thinking, taken to its extreme means that even a monkey on a typewriter will eventually type the complete works of Shakespeare – if given enough chances.)

Even after taking a course in critical thinking – or in my case teaching it many times — we still shoot from the hip; go with our gut. We can tell just by looking at someone whether they have what it takes to be a good hire, a good investment, a good friend.

We are all like Harvard’s most famous MBA, George W. Bush, deciders-in-chief, who go with our gut feelings. This makes us not very good at it being deciders, though it’s what we do so often. (As every marketer knows, we buy on emotion and justify with logic.) Despite being endowed with a large collection of grey matter encased in a hard bucket between our ears, we don’t use it much. We are capable of brilliant insight and reasoning, but too often we fake it because, well, thinking is hard work and too often results in answers that are inconvenient at best and unwelcome at worst.

So a course in critical thinking can be empowering, providing us with tools that can be applied to sort out the relevant from the irrelevant, and define alternative solutions, while thinking broadly enough to ensure that nothing is overlooked.  The logic tree is but one of these tools and it can be useful when practiced often.  But a tool is only as good as the person wielding it.  A golf club in the hands of Tiger Woods is an extraordinarily precise, yet powerful instrument.  In my hands it is a metal stick weighted on one end.  The same goes for the tools of critical thinking. Practice them often; develop the skills for using them, and we have powerful tools. Use them once in a while and they are obtuse exercises that waste time.

So there you have it, deciders.  We need to think better more often.  That’s my gut feeling.