Philip Whiteley's Blog

October 12, 2010

Speculative bubbles in stories

Filed under: Uncategorized — felipewh @ 9:12 am

Lunching with Ann Graham http://www.linkedin.com/in/annbgraham on Monday, we had a great discussion on how organisations, indeed all human networks, are shaped and understood by stories. This is true also of the quantitative analysts. They may be good at data and at evidence (not always the same thing) but they’re still telling a story. The telling matter about the narrative that takes hold is how true it is. Just as you can have a speculative bubble in money, you can have one in stories. Too much faith is often placed in a story even as its contours begin to depart from reality. Then real life has its revenge.

The decisive questions are: Whose story is the more accurate? Whose story will take hold? They’re not always the same.

Those who, like me, have highlighted the importance of employee engagement have emphasised how executives should understand the view from the floor. But what about a situation where the story from the board is the more accurate? Tricky.

You see this at the moment at national government level in the UK. The Coalition Government understand the need for cuts, but much of the public don’t appreciate the risks of high levels of government borrowing.

A lesson is that we should always let the authors of the narrative be the direct witnesses, wherever possible. The call centre worker will be better informed on customers’ experience; but the finance director can testify better on corporate debt. We also need to be prepared to question our own preferred narratives, no matter how reassuring they are.

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1 Comment »

  1. Nicely said Philip. The speculative bubbles in business news are a serious impediment to using the news of real events to create solutions. This was the theme of my afternoon conversation with Simon Caulkin!

    Comment by Ann Graham — October 12, 2010 @ 12:37 pm | Reply


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