Habit 2 of Bad Thinking

I have to give a presentation on the "Seven Sins of Bad Thinking" and I mostly just talking about one on this blog: ignoring either costs or benefits. I'm going to add a second to the list today and it starts with a story.

Say you have 10 employees and you're adding an 11th. You have a couple different products that you produce and you need to put the 11th employee on one of those product teams. One of your VPs say to put them on product A because you'll get the biggest increase in production (in units) if you put the new guy on team A--and it's all about productivity. Another VP says to put the new guy on product B because product B brings in the biggest profit per unit--that's where the big money is. What do you do?

You say they both are only telling half the story. Your goal is to maximize profit and to do that you need to think about both how many units you make and how much you profit from each. The value of the employee is (marginal units)*(profit per unit) and you can't just think about one aspect or the other.

That might seem obvious but how often do we focus solely on what is possible or solely on what is certain when we should probably be thinking about what is more likely?

(There was an example to go with this from a discussion I had with a friend. But when I wrote it down it was a mess so I'll just post the short version.)

Normative and Descriptive: Update

I don't put myself high above others. Now, by personal experience, I mean I'm a musician. By knowledge, I mean I'm a musician who knows how music works. I know quite a bit of music theory to tell you the simplicity of the song, but I wouldn't be able to put it in lament terms. Also, you can listen to her, but to act as if she's some kind of musical genius is idiotic. [She] isn't creative. [This song] is hardly even intelligent or charming.

That's a direct quote from a (judging from tone) very reasonable person writing about Lady Gaga.

But being reasonable and knowing the obvious--that tastes are subjective--doesn't stop this person from, at least appearing, to make statements about what music is objectively good. The progressive use of the terms "simplicity," "creative," "intelligent," and "charming" show a drift some adjectives that could reasonably have an objective meaning (if you put a song on paper in some encoding scheme, some would be easy to compress due to repetition etc. thus simple) to code words for good and bad (people are charming, songs aren't).

Maybe he or she did intend all those adjectives to be seen as objective descriptions. Maybe he likes Lady Gaga, but thinks she lacks charm, intelligence and creativity. But I wouldn't put money on it. Those things, like beauty, are largely in the eye of the beholder.