Who would be an expert these days?

How the World changes.  And how quickly!

  • There was a time when you might have aspired to being an expert.
  • You might have gained some status from it and a sense of self-worth.
  • People might have respected you.

Over this last year or two, however, almost all kinds of experts have come into disrepute.  It is almost a thing to be ashamed of.  I do not know if I dare call myself a ‘risk management consultant’.

What has gone wrong?  Here are a few examples.

  • The pollsters got the results of the elections here and in the USA wrong.  And the EU Referendum.
  • The economy did not collapse when we voted for Brexit.
  • We have all got used to experts contradicting one another when it comes to our health, especially regarding healthy eating and exercise.
  • Weather forecasts have been spectacularly wrong rather often.

Our perception was heightened because:

  • The Leave campaign made a point of rubbishing experts, because almost every reputable (?) organisation supported Remain and emphasised the risks of Brexit.
  • The Leave campaign tried to sound as if they were outsiders up against the Establishment.  How members of the Cabinet pulled that one off, I do not know.  Experts were virtually defined as Establishment insiders.
  • Donald Trump was even more scathing in his attacks on all the American Establishment and everyone else who disagreed with him about anything.  That included experts.  A billionaire managed to sound like a Man of the People who had got where he did by ignoring experts.  Really?

Why have experts got it wrong so often?

Pollsters rely on the information they collect.  If people change their minds, or simply lie, there is not much pollsters can do.  I do think, however, that they might have thought that conservatives could be less likely to respond to a questionnaire than others, as I have said previously.

Brexit:

  • Economic forecasting can never be an exact science.
  • It was impossible to know how international businesses would react to a Brexit vote, especially regarding the timescale of any reaction.  Some say the worst is yet to come.
  • Some of the most extreme predictions of doom if we left the EU were made by politicians, not economists.

Our health is affected by so many factors:

  • everything we eat, not just one particular food,
  • our exercise regime
  • smoking
  • our whole lifestyle
  • each one’s personal metabolism
  • medication

So you might follow the latest advice and find it does not work for you.  You could be the exception.  Or you misunderstood it.  I am not going to start smoking just because some heavy smokers get away with it.

 

Weather.

Britain is unusual in being affected by so many weather systems.  Forecasters have to predict so many factors and get them all right at once to make accurate predictions.  Sometimes they succeed.  That is not news.

So should all experts be forgiven?

Not quite.  Some are far too confident, if not arrogant, in the way they state things.  In reality, you should express predictions in terms of probabilities, or ranges of likely outcomes rather than trying to be more exact than is realistic.

To be fair, the failing in this respect is often the fault of the media.  A report showing probabilities or ranges is likely to be summarised and oversimplified in a newspaper article.  Headline writers are the worst culprits of all.  Sometimes, the body of an article sets out the caveats stated by the experts, but if you just notice the headlines you will get an oversimplified view.

Perhaps you should read my book

How to avoid being misled by statistics.

How To Avoid Being Misled By Statistics

Go to https://www.createspace.com/4767398

 

What is your approach to negotiation?

Negotiation is an essential part of business, as well as of politics and everyday life.  It has been said that it is the number one skill needed in management.

It is sad therefore that many people do not know that there are different kinds of negotiation, and that it is important to adopt the kind most appropriate to the particular situation.  I do not intend to look at every possible type of negotiation, but I will point out one important division that should always be kept in mind.

The most popular understanding of negotiation was that advocated recently by Piers Morgan.  He was talking about Brexit (what else?) and likened it to haggling in a bazaar.  The vendor suggests a price far higher than he expects to get.  The buyer offers less than half.  They move towards each other in a series of steps and end up with something reasonable.

This kind of negotiation is combative.  One party wins and the other loses.  The vendor wins if he gets more than the market price for his goods.  The buyer wins if he gets them for below the market price.  Some say that’s capitalism.

Pic4

There is another model, however, where the aim is to find a solution which is beneficial to both, or all, parties.  It is called a ‘win-win‘ situation.   The bazaar model could be called a ‘win-lose’ situation.

Different industries have different traditions regarding the type of negotiation practiced.

Why?

In many situations, it is desirable to establish a long term relationship with suppliers and customers.  Management and the workforce also should be considered as long term partners in business from this point of view.  Sensible businessmen want a harmonious relationship with others.  It is not in your interests for your customers or your suppliers to ‘lose’.  That could mean they have to cut back, reduce quality, or go out of business.   Short term wins can lead to long term failures if you drive too hard a bargain.

I do not want to be insured by a company that keeps offering such low premiums that it loses money.  Will it be there when I need it?

When might you prefer the win-lose model?  

When it is a one-off situation.  When you are not expecting to see the other party again.  When you do not care about their future.  Grab the money and run!

Where does that occur most?  

One industry where that is the norm is property.  (Real estate in the USA). You want to get as much as possible for a plot of land you are selling.  If that leads to a cash flow crisis for the purchaser, what is that to you?  And vice versa.

Where did Donald Trump make his billions?  Real estate.  Yes.  He is an expert in win-lose negotiations.

I hope both sides in the Brexit negotiations will go for a win-win solution.  It is not in Britain’s interests to have impoverished and embittered neighbours across the channel.  Ongoing cooperation in business, security, the environment and defence will always be needed.

How do you negotiate with your clients?