Critical thinking can be extremely useful if applied effectively to the practice of business analysis. A key element of critical thinking is being able to spot logical fallacies in your thinking and in conversations with stakeholders. Logical fallacies when recognized, should not be ignored as ensuing decisions can easily lead to inaccuracies. Identifying these fallacies is a first and crucial first step to eliminating them in daily interactions with stakeholders.
Here are 5 logical fallacies to be aware of:
Argument from Authority
This fallacy goes like this: “Manager X believes Y, Manager X speaks from a position of authority, therefore Y is true”.
Stakeholders in most cases, have preconceived notions of where problems exist in an organization. As such, it’s possible for the analyst to encounter several SMEs or authorities who are knowledgeable about problems in the domain or organization. The mere fact that a person is highly placed does not mean that their claims are always true. The analyst should therefore, look beyond posts, experience, reputation and formal degrees to investigate all claims. After all, no matter the amount of experience a person has, he or she can still be wrong.
The same goes for frontline staff; the fact that frontline staff usually have less authority does not mean that they do not have any valuable information to contribute. The key takeaway is to investigate all claims, regardless of the authority (or otherwise) associated with the person.
An analyst says after the first week on a project, “I can tell that this project won’t work, just from observing the attitudes of the end users. They don’t seem to be enthusiastic about this project”.
Hasty generalization is said to have occurred when the analyst rushes to a conclusion before gathering all the facts. Such rushed conclusions are usually based on insufficient or biased evidence. To make a fair and reasonable evaluation of project success, the analyst must have discussed with several stakeholders, immersed themselves in the organization to get a sense of people’s perspectives, and invested significant effort in trying to reduce negative vibes.
Generalizing before getting all the facts right is a fallacy that should be avoided in all situations.
This can be said to have occurred when the analyst oversimplifies reality by reducing it to only two choices.
Let's say a company is having problems keeping up with competition. On closer investigation, it is discovered that a system that allows the company to store, manage and analyze customers' buying patterns would be helpful in improving customer satisfaction and staying ahead of competition.
If the analyst were to simplify this reality by evaluating only two options: building or buying a CRM, a false dichotomy can be said to have occurred. This is because there are a host of other solutions that could work well in this scenario. What if data on customers' buying patterns actually exists but is not shared due to the siloed nature of the company? What if outsourcing this function could deliver the desired benefits? By considering only two options, the analyst has ignored a range of choices that could manifest as viable solutions on the long run.
The fact that A and B happened together does not mean that A caused B or B caused A to happen. Likewise, the fact that A preceded B, does not mean A caused B.
Let’s assume Company X lost a lot of sales during the holiday season. One could assume that the holiday caused a reduction in sales. This is one possibility. It's also possible, that a third factor led to the reduction in sales. The morale of salesmen may have been low during that period or a failure to maintain minimum stock levels could have caused a drastic reduction in inventory levels, leading to a loss of sales.
Failing to consider other factors apart from the obvious or incorrectly linking association with causation constitutes a logical fallacy.
Have you ever worked in an environment where users would rather qualify the system with every negative adjective in the book than say exactly what is wrong with it? You can recognize this easily when you hear a statement like, ”the current system is ineffective; the vendor was only bothered about saving costs”. This type of statement attacks the person(s) in charge of implementing the system without saying exactly what is wrong with it. Statements like this should prompt the analyst to ask questions on what the exact issues are.
Analysts should recognize fallacies and nip them in the bud before they aggravate the situation and create a negative impact on the project.
Practise identifying these logical fallacies in everyday situations to improve your critical thinking skills.