I guarantee this post will offend people, who don’t use facts to support their positions. And, I don’t give a damn about such people.
The most important factor in making business decisions is facts. The more facts you have about a business problem, and the better able you are to use those facts, the more likely you are to solve your problem. The fact that most small businesses fail is ample evidence that few small business owners evaluate facts well. My business has been around for more than twenty-five years. So I claim street cred.
There are two important steps necessary in using facts to solve problems. First, you gather facts. Second, you identify the facts relevant to your decision.
Here’s the New Year’s resolution I wish for most Americans. Derive your opinions from facts. If you have no facts, have no opinion. Note that facts come first, and opinions come later. The order counts. Don’t form an opinion and then search for facts supporting the opinion.
A perfect example of getting the order wrong is the recent Rolling Stone article on an alleged gang rape at a University of Virginia (UVA) fraternity. The writer started with the opinion that fraternity men commit gang rapes and then proceeded to look for facts supporting her already decided conclusion. She sought out a story from a UVA coed without checking ANY of the story. Her conclusion about the gang rape preceded any attempt to find facts. In fact, she never made any attempt to find facts. She just accepted a story, using as a lazy excuse, that she was being sensitive to the victim’s situation. Every jackass has an excuse for laziness.
Within a few days, the story fell apart. None of the dates from the story were accurate, and the alleged rapist had no connection to the alleged victim. One need hardly mention that the alleged victim was stone cold, passing out drunk during the incident, not exactly a credible witness even if something did happen. The story was a fraud in every significant way. The Rolling Stone “regrets” not checking the facts. They should get back to their main business writing puff pieces about rock stars. Journalism isn’t a core competency for them. They also set back the case against sexual abuse a decade or so.
The order matters. First you obtain facts. Then you develop your conclusion.
Second, after gathering facts, determine which ones are relevant to your decision. The riots in Ferguson are perfect example of using the wrong facts. This is a fact. African American men get shot and killed by the police at a higher proportion than white men. This is an undeniable, but absolutely irrelevant fact to the Ferguson situation. Here’s why.
Let’s look at what makes up a proportion. A proportion consists of a numerator and a denominator. A proportion is the quotient of a division operation using the numerator and dividing by the denominator. Yes, this is math. If you don’t understand these terms, you shouldn’t have opinions about proportions as you are unable to evaluate them intelligently. In fact, you shouldn’t vote, and you definitely shouldn’t reproduce. Such reproduction is the root cause of poverty, but that’s a subject for another post.
The numerators in our proportions are the number of people shot and killed by police, in one case African American men, in the second case white men. The denominators are some measure of population. In the first case, the denominator is the total number of African American men. In the second, case, it is the number of white men. So in both cases, we are taking the number of men killed and dividing by some measure of population yielding two proportions, the first of which is higher then the second. Thus, something must be wrong. If all men are created equal, the proportions should be the same. This is the logic of the protesters, even if the vast majority are unable to express their logic in these mathematical terms.
However, why are these proportions the correct ones to use? Can we find a better set of proportions to evaluate if police treat African American men unfairly compared to white men in the situations where police officers are attacked? I submit there is a much better set of proportions to measure, which entirely change the analysis.
We are dealing with a situation where an African American man attacked a white police officer and got shot and killed. This is undisputed from witnesses and a hospital report on the police officer. We find, in the situation, the best numerator and denominator to use. The numerator should be men, who have attacked police officers and been killed. In one case, we use African American men, who have attacked police officers and died. In the second case, we use white men, who have attacked police officers and died.
The denominator will be the population of men, who have attacked police officers. In one case, the denominator will be African American men, who have attacked police officers. In the second case, it will be white men, who have attacked police officers. These proportions best show if police officers treat African American men differently from white men in the specified situation. Are the proportions the same? I have no idea, and you don’t either. I also don’t plan on attacking a police officer to gather statistical evidence. I suggest you forgo such an analysis as well.
The statistics aren’t easily available, if available at all. No facts, no conclusion as noted earlier. We can’t evaluate if African American men, who attack police officers are killed disproportionately compared to white men, who attack police officers. Note the difference in conclusions when you seek the appropriate facts. No, you don’t always get an answer, but you avoid an incorrect answer such as the one reached by the Ferguson protesters.
How does this apply to making business decisions, as this is allegedly a business blog? Good decision making comes with understanding the process and practice. The learning process for making fact based decisions can be painful, if you practice only on your business. Pain means losing money. None of us can likely affect the Rolling Stone idiocy or the Ferguson and related protests, but we can practice our fact based decision making risk free on national events. That’s free. We can also ridicule those, who can’t make fact based decisions. Why do that? Because it’s fun.
Let’s debunk one more myth. All opinions are equally valid as in, “That’s just my opinion, man. We’re all entitled to our opinions.” Yes, we are all entitled to opinions, but many opinions are simply incorrect and of no value.
For example, if in your opinion, two plus two equals five, you are simply incorrect. The fact that two plus two equals four contradicts your opinion and renders your opinion worthless. An opinion unsupported by facts is simply incorrect.
Do I sound angry in this post? Of course I do. Much of what ails this country comes from poor decision making in the absence of relevant facts. Find a national problem and apply fact based decision making. You’ll be angry as well. Next time, I promise to take my distemper shot before writing.
Thanks for reading! As always, please visit the main S&K web site at www.skcpas.com for real tax and accounting advice. Also please like the “How to Screw Up Your Small Business” Facebook page. I post shorter pieces there.
Until next time, let’s do it to them before they do it to us.
