Strategic Decision: The Difference between Data and Good Judgment

Strategic decision making can encourage you to stronger better paths to achieve important goals. When decisions are well thought out they can help you get closer to where you want to be while using much less effort. Understanding the difference between data and the interpretation of that data helps in seeing and then figuring out the choices that lead down varying paths. A few tips may help you think through options and make more accurate choices that help you improving business and career outcomes.

Understanding the data and thinking through the options affords an opportunity to create critical thinking. Critical thinking can be defined as the objective analysis of information and options that leads to a decisive conclusion. To do this well requires that ability to see the possibilities and pick the ones that are not only most likely but also help you achieve your goals. 

Step 1: Define Your Goals: Knowing your goals and what you want to accomplish might be the hardest part of thinking strategically. We may think the data should define our goals but that isn’t always true. Our general direction and goals be a guide to our everyday decisions to ensure we have a framework for interpreting new data. Keeping your long term goals in mind will help you make the daily decisions that help you get there. 

Step 2: Understand the Data: Understand what the data covers and what it doesn't. This requires knowledge of the methods of data collection and the areas that the data has no measurement. Better knowledge of the data will help you stay away from illogical interpretations. 

Step 3: Evaluate the Interpretations: Data is just numbers and letters but there are always multiple interpretations of that data; the most popular isn't always the most accurate. Make sure that you understand all of the most likely interpretations of the information to ensure that the main paths are exposed. This is important if you want the full breadth of options because some of the best one's are not always apparent.

Step 4: Narrow Down the Paths: Based upon logic, experience, risk, and reward narrow down your options to the one or two that will most likely help you achieve your goals. Out of the many possibilities only a few will make any real sense to you. Some can be discarded right away.

Step 5: Select Option and Alternative Option: Among the remaining few options you should select the primary and the secondary option as a strategic action forward. If the primary doesn't work out for some reason you can fall back on your secondary plan. The final selection should include not only your experience, and knowledge, but also sound judgement as this is the selection that will impact a future course of events.

Does Data and Our Personalities Impact How We Invest?

Data is used to understand the environment and make investment decisions about new products and services that directly impact the stock market. Recently, the Institute of Supply Management made an accidental miscalculation on the May Purchasing Manufacturers' Index by published 53.2 and then revising that estimate to 56 after the error was discovered (Strumpf, 2014). Due to the importance of that economic indicator stocks bounced downward and then leaped upwards 26 points after the revision.  The change made sense with investors who saw a tough winter and potential spring rebound. 

Stocks can be finicky on new data. The information provided from credible sources, often released from large institutions, are given more weight than smaller publishers. This doesn’t change the fact that they are still a single reference point that when taken in isolation can lead to inaccurate perception. A single switch of a number, miscalculation, or ignored measurement can change the results dramatically. A small mistake can have much wider market implications.

Market over reaction to news is not something new. For example, press releases of companies hiring consulting firms and making other strategic decisions can have an impact on stocks (Bergh & Gibbons, 2011). News naturally impacts how investors perceive the environment according to their strategies and learned problem solving matrix. This phonomenon is experience when government policy releases create a positive or negative reaction on the market. 

Hyper active stock trading lies in the personalities of the investors and their investment strategies. Naturally investors who seek quick returns are likely to be more reactive to new information in an attempt to gain quickly or avoid loss. You can see this in the activities of day traders who take short gains and long-term investors who wait out the market. Each uses strategies derived from their personalities.

The phenomenon of impulsive reaction or reflective contemplation has been experienced in a number of different experiments. A study by Ledzinska, et. al. (2014) found that the time it took for participants to read instructions in a computer task and formulate a search strategy was related to their reflection-impulsivity diagnosis (R-I). The study highlights how some personalities brush the surface information and others contemplate the deeper meaning of that information.

In the investment world data is extremely important for decision making. When data is drawn from multiple sources it is generally stronger and more accurate than when derived from a single source. Savvy investors seek both breadth and depth in their information. The totality of the information allows large investors to make more accurate determinations of stock choices. Width is seen as using multiple markets and depth moves into the logic behind the calculations. Having knowledge of major market trends and how the individual data pieces are calculated helps to avoid rash decision-making when erroneous information is accidentally presented.

Ledzinska, M., et. al. (2014). Cognitive styles could be implicitly assess in the internet environment: reflection-impulsivity is manifested in individual manner of search for information. Journal of Baltic Science Education, 13 (1). 

Bergh, D. & Gibbons, P. (2011). The stock market reaction to the hiring of management consultants: a signaling theory approach. Journal of Management Studies, 48 (3). 

Strumpf, D. (June, 2014). Stocks End Up Despite Jolt From Erroneous Economic Data. The Wall Street Journal. Retrieved August 2^nd, 2014 from http://online.wsj.com/article/BT-CO-20140602-711023.html

Teaching Critical Thinking through Aristotle's Conception of Friendship

The difference between critical thinking and creative thinking can be profound but they often merge together to create something new and practical. In the process of finding solutions creativity can build new ideas while critical thinking can test the viability of those options. Creativity builds something unique while critical thinking seeks to analyze information into something that can be understood, interpreted and evaluated. Dr. David White discusses how to use Aristotle to foster critical thinking among students (2010). 

Critical thinking of a story narrative requires recognition, analysis, evaluation, and alternatives. It is important for students to recognize the main issues, the main points, and be able to summarize. Analysis requires understanding the steps the author took, prioritization, and knowing the difference between premises and conclusion.   Evaluation includes understanding how the main points are derived, whether premises justify the conclusion, and the separation of personal bias from the situation. Finally, it is important to understand the potential other interpretations and conclusions. 

All critical thinking requires the establishment of arguments and then the breaking down of those arguments for analysis until premises and conclusions can be created. Complex ideas are broken down into its individual components while keeping the larger conception in mind. These individual components are reviewed and analysis to create conclusions about how they explain the broader phenomenon. 

 To highlight his point the author uses a section from Book VII of the Nicomachean Ethics by Aristotle:

1. . . . the next subject which we shall have to discuss is friendship. For it is some sort of excellence or virtue, or involves virtue, and it is, moreover, most indispensable for life. No one would choose to live without friends, even if he had all other goods.

2. Friendship also seems to hold states together, and lawgivers apparently devote more attention to it than to justice. For concord seems to be something similar to friendship, and concord is what they most strive to attain, while they do their best to expel faction, the enemy of concord.

When people are friends, they have no need of justice, but when they are just, they need friendship in addition.

3. For, it seems, we do not feel affection for everything, but only for the lovable, and that means what is good, pleasant, or useful.

4. But it is said that we ought to wish for the good of our friend for the friend’s sake. When people wish for our good in this way, we attribute good will to them, if the same wish is not reciprocated by us. If the good will is on a reciprocal basis, it is friendship. Perhaps we should add, “provided that we are aware of the good will.” For many people have good will toward persons they have never seen, but whom they assume to be decent and useful, and one of these persons may well reciprocate this feeling.

5. We conclude, therefore, that to be friends we must have good will for one another, must each wish for the good of the other on the basis of one of the three motives mentioned, andmust each be aware of one another’s good will.

When dealing with such a complex text the student will summarize the meaning of the text, analyze the individual forms, evaluate the text without bias, try and understand alternative explanations. This creates a depth of understanding when seeking to comprehend complex works and make sense out of them. The book talks about friendship and the various meanings to that friendship from usefulness, pleasure and virtuous friendships.  It requires understanding a complex scenario with many different parts and vantage points. The meanings are subjective but often rooted deeply into our cultures and personal experiences. Moving through this ambiguous analysis helps students formulate better problem solving models. 

White, D. (2010). Gifted Education: Thinking (With Help From Aristotle) About Critical Thinking. Gifted child Today, 33 (3).