I get a lot of requests to discuss further the application of intelligence analysis to business, so today I’ll discuss the uses and limitations of a common analytic technique.
One tool that I teach at IE is the Analysis of Competing Hypotheses (ACH). ACH is an analytic tool originally developed by Richards J. Heuer at the CIA, but it is remarkably useful in business as well. 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. To illustrate this tendency, read the words in the three triangles below:
If you’re like most people, the phrases “written” in the triangles are familiar. To find out what’s actually written in each triangle, refer to the bottom of this entry (or try the old proof-readers trick of reading them backwards).