The Conclusion Trap: Four Steps to Better Decisions

by Dan Markovitz

As a management consultant, Dan Markovitz has seen too many executives waste money on “Ready, Fire, Aim” decisions which yield no benefit—and sometimes even make things worse. “Frankly, I’m tired… of seeing leaders jump to conclusions and taking action without really understanding their problem.” This concise 67-page book resonates with me and I think it applies not only to business, but also more broadly to political policy on many of society’s complex issues, such as education and healthcare.

“When you don’t understand the real problem and simply jump to a conclusion, you tend to reach for one of three solutions: (1) Shiny new technology, (2) Reorganization, (3) Money. More often than not… you’ll have a shinier, more expensive, differently organized version of the same problem that you had before.”

The author says most reorganizations “destroy relationships, experience, and tribal knowledge that expedite decision-making and improve performance. Reorganizations bulldoze those intangible assets into oblivion, ensuring that for six months at least, a company will be operating much less effectively.”

“Customers have zero interest in how you’re organized internally. They want good products and services at fair prices. If they’re not buying from you… 99.9% of the time, the root cause of your problems is not the org chart.”

JUMPING vs. ANALYZING. In Thinking Fast and Slow, Daniel Kahneman differentiates between fast, intuitive, and emotional System 1 thinking and slower, deliberative, and logical System 2 thinking. “System 1 and System 2 is hard to remember. Let’s call them Jumping and Analyzing, or the Jumper and the Analyst.”

“The Jumper inside you gravitates towards symptoms. They’re easy to see and comparatively easy to address. It’s the Analyst inside you that has the cognitive power to find the root cause of those symptoms, and to really fix the problem.” This reminds me of what Howard Marks calls second-level thinking—thinking beyond superficial answers.

FACTS vs. DATA “Taiichi Ohno was the father of the Toyota Production System… Ohno said, ‘Data is of course important in manufacturing, but I place the greatest emphasis on facts.’ You can leave out the word manufacturing and apply the concept to anything in your company or your life. Facts are more important than data.”

“Data tells you how often a machine breaks down on an assembly line. Facts—direct observation—show you that the machine is dirty, covered in oil, and hasn’t been cleaned and maintained in a long time… Facts will tell you to clean and maintain the machine on the assembly line, but data will help you figure out how often you need to do it to ensure quality… You need both facts and data.”

The author recommends four steps to avoid jumping to solutions:

  1. Go and see
  2. Frame the problem
  3. Think backwards
  4. Five whys

“These four steps will only provide you with a good problem statement—that is, a clearly defined problem—but not a solution… It’s a necessary precursor to finding something that really works.”

GO AND SEE. “When he talked about his preference for facts over data, [Ohno] was urging people to go and see for themselves. Gathering facts comes from close observation of people, of objects, of spaces…  where the work gets done, and where the problems occur… It means that you can observe what’s happening firsthand, ask questions of the people working there, and learn what the facts really are.” The Toyota Way refers to this as “genchi genbutsu.”

“When you go and see, you need to practice what management scholar Edgar Schein calls humble inquiry. According to Schein, humble inquiry ‘derives from an attitude of interest and curiosity. It implies a desire to build a relationship that will lead to more open communication’ … Traditional hierarchical workplaces create unbalanced power dynamics that work against this kind of interaction.”

“Suspend judgment. Uncover the root cause.”

FRAME THE PROBLEM. “Solving a problem is not a single, discrete step. It’s actually a process, and one that starts with a clear statement of what the problem actually is. Framing the problem properly is the first step on the road towards finding the right solution.”

“It’s easy to mistake the symptom for the underlying problem.”

“If you see that your problem statement has only one solution, rethink it. Reframing the problem can help you avoid conclusion jumping… The golden rule is to begin with observable facts, not opinions, judgments, or interpretations.”

THINK BACKWARDS. “The fishbone [diagram] provides the structure and organization for your analytical brainstorming. But more importantly, it encourages you to ‘think backwards—to look for the issues that underlie the observable symptoms… and encourage you to find root causes… It’s a tool, not a straitjacket. If it’s intimidating, don’t use it. You could accomplish the same thing in a table, where you put each category in a different column.”

FIVE WHYS. “It might only take three, or as many as eleven, but eventually you’ll get to the root cause… You also might need multiple rounds of Five Whys to deal with larger issues, because there’s no single cause in complex systems.”

With complex problems, you will need to put multiple countermeasures in place. “Because these tools help you understand a problem more deeply, you’ll almost certainly find that the problem is multifactorial… You’ll need more than one ‘solution’ to deal with it… But don’t be discouraged. Having multiple countermeasures increases the likelihood that you’ll actually fix the problem for real.”

Markovitz, Dan. The Conclusion Trap: Four Steps to Better Decisions. D&L Publications, 2020.  Buy from Amazon.com

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