Thursday, May 24, 2007

Bad reasoning

Logical fallacies abound in the corporate world (and elsewhere too). Bad reasoning creeps into many critical decisions that companies face. Here's an example that I ran into recently. There are two systems in a process (actually more but for simplicity, we will confine it to two). It has been observed that whenever system two is under-performing, system one will also under-perform. But sometimes system one will under-perform and system two is chugging away perfectly happily.

I was talking to one of the operations managers and he told me that because he could not correlate the performance of system one with system two, he decided to ignore system two. Taken aback, I tried to explain to him that it is clear that there wouldn't be a perfect correlation because if system one has its own problems then sometimes it will under-perform when system two is performing but whenever system two is under-performing, system one will definitely under-perform too. In other words, A implies B but B does not necessarily imply A and so there cannot be a perfect correlation. After some time, he finally got it and decided to include system two in the scope of his analysis. I should note that this guy is an engineer from a decent school. I suppose I should be happy he got it in the end but it did give me pause to think of the number of times bad reasoning made it through and was acted upon by people who should have been trained to think logically.

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