Playing devil’s advocate to your own plans
Runde and Feduzi have adapted Bacon’s method to use with business scenarios, detailed in their paper “Uncovering Unknown Unknowns: Towards a Baconian Approach to Management Decision-making”, published in the journal Organizational Behavior and Human Decision Processes. It’s not just thinking out of the box, they say – it’s thinking way beyond the box, playing devil’s advocate to your own plans. And unlike the traditional approach that is essentially reactive, what they are proposing is a proactive approach to gathering evidence in which the creation and testing of business scenarios are part of the same process.
“We urge people to imagine possible influences that might lead to business scenarios that are radically different from the one they think is most likely,” says Runde. “But that is only part of the story. The other part is then to encourage them to go out, do some research, and attempt to confirm that those influences could actually become a reality that affects their business. Very often they will not be able to do so. But the point is that by being induced to look for information about extreme possibilities, they will be taken away from the familiar places they would normally be looking and thereby put themselves in a position of learning things that are truly new to them. Effectively, the method we are proposing provides a means to counteract the confirmation bias, as well as many other biases that have been identified by behavioural psychologists. And it can be done on either end of the spectrum – extremely good outcomes or extremely bad outcomes.”
So say you’re a young, ambitious entrepreneur looking to start up a coffee house in the Middle East, against huge competition from global players like Starbucks and Costa. You might think about the risks of not being able to obtain the right staff, or not attracting enough customers, and so on – these are your “known unknowns”. The trouble is that there may be risks you aren’t able to identify – the “unknown unknowns”.
What, for example, if there is something out there that will make your coffee supply dry up completely? It might not sound likely. But it’s certainly an alternative hypothesis. And if you do some Googling on the subject, you’ll quickly find that the wild Arabica coffee plant, which makes up around 70% of the world’s coffee supply, is under threat from climate change – and one study has predicted it could be extinct by 2080. Now you can respond in a variety of ways. At the very least you’d be revising your prior scenarios. But you might also revise your business model entirely. You could market your coffee as a super luxury product. You could find an ethical or sustainable source. Or you could decide that coffee is too much of a risk, and find an alternative business.