Milo and I organize a workshop on Tuesday, May 29 on ACH (Analysis of Competing Hypotheses). ACH is a tool originally developed by Richards Heuer at the CIA to analyze complex and uncertain situations. It is widely used in intelligence and international politics, but Milo and I think it applies equally well to business for strategic decision making. ACH uses a deceptively simple framework to use ideas from the scientific method, cognitive psychology and decision analysis to overcome a common but immensely important bias: the fact that we tend to perceive what we expect to perceive rather than what actually exists.
ACH helps overcome the predilection to notice only “confirming” facts by insisting that we systematically search for evidence that disconfirms our views. It begins by constructing a matrix with the Y axis labelled “Evidence”, and the X axis listing mutually exclusive (indeed, “competing”) hypotheses that would drive your decision; in later steps, you fill in the resulting matrix by noting which
The observation of the Sun’s rotation is compatible with both geocentric and heliocentric hypotheses
evidence in the Y axis disconfirms each hypothesis in the X axis. In practice, things are more complicated, because generating hypotheses is difficult. It is also difficult to self impose the discipline of disconfirming hypotheses, especially for things that seem obvious (like the sun revolves around the earth).
The workshop will focus on an assessment of the electric vehicle market. The idea is to go beyond the clichés and good intentions to define strong hypotheses on this issue. It brings together 25 executives and researchers. The workshop will take place at the Learning Lab, the center of educational innovation jointly created by EMLYON Business School and Centrale Lyon engineering school.
For more information, see Milo’s post on ACH.
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