Posted in Future, People, Research, Selling & Persuasion, Strategy

Sick of the experts?

This is a rambling rant, so forgive me while I vent.

I AM SICK OF ALL THE EXPERTS. Aren’t you just sick & tired of all prognostication too? Everybody is an expert. Everybody has a prognosis. Everybody has a cure. Have you noticed how consultants are suddenly experts at developing recession-busting strategies?

I am not an expert. There are certainly people who know more than others about some things, but they don’t know everything, and they certainly don’t always know enough. There are a bunch of people who think they are experts and there are people who take comfort from following people who know (slightly) more than they do.

The credit crunch came about because spreadsheet models that calculated ‘risk’ – didn’t quite get it that Joe Blo wouldn’t be able to pay his mortgage if he didn’t have a job. It did very well at doing wage projections and calculated beta factors for the risk model, but the essence of human behaviour could not be captured in a statistical model.

I got an email from an ex-student (MBA) recently with a link to an article explaining how the ‘global financial crisis’ is quite possibly because everybody came to rely on a (relatively new, but as it turns out, also fatally flawed) risk model. It was a very elegant formula – and all the smart people in the big financial institutions followed it. It turned it to be wrong, so there goes the Nobel Prize and a pretty big chunk of our future. He said it made him think of the marketing lecture I gave early last year. (Read the article here – it is quite interesting.)

The fact that I taught them (more than a year ago) that they should not rely (solely) on sophisticated models and fancy market research (as MBAs are wont to do) without remembering that those numbers are but a very poor attempt to quantify what is essentially irrational, unpredictable people living their lives.

One student asked me (the very good question): ‘Why are we then here studying this stuff?’
My reply: So that you can figure out what you don’t know, and so that you can learn form the past. This does not mean you should be repeating the past. In a rapidly changing world knowledge is outdated by the time you acquire it.

The ‘market’ is – in case you have forgotten – is just a bunch of people doing what they want.

I know this post is not particularly helpful – except maybe as a warning, but I feel better now.

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3 thoughts on “Sick of the experts?

  1. If you are referring to the experts we see on TV, etc., then I think you’re right on target. All the major media outlets are interested in is selling advertising. Controversy and extreme opinions sell. I don’t think the people who put experts on the air are particularly interested in who’s right. It’s entertainment.


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