Stories Trump Stats

I had the opportunity to sit in on an excellent presentation about critical thinking during The IIA’s All Star Conference last month. (You can see a short write-up about it on LinkedIn.) [Note: To view the LinkedIn article, you must join the IIA All Star Conference LinkedIn subgroup. From the Institute of Internal  Auditors group page, click "Subgroups" to access the All Star subgroup.] There were a lot of good points, but the one that really stuck with me was “We prefer stories to statistics.” I heard this, did a little “Amen,” and continued listening to the presentation. 

But I find myself newly haunted by that concept; it is causing me to think more closely about what I am actually being told. I find myself listening to news reports more critically. I catch myself listening to friends more critically. I realize I am listening to my wife … never mind — let’s just say I’ve survived 27 years of marriage by paying attention to her already. And what I found, as I paid more attention, was how much of the information we receive is based on stories, not on facts. And some of the most critical decisions we make are based on stories, not facts. Let’s talk about an example from the past.

A few years ago there was much hoopla about the health risks of breast implants. In fact, Dow Corning eventually settled for something over US $2 billion dollars. Yet, there is still no evidence supporting the correlation between breast implants and health risks. But it all started with a number of stories. And those stories mushroomed until the manufacturer found it easier to settle (for a big nickel) than continue to try and prove the point that facts did not support the anecdotal evidence. But most people still think that risk existed. And let’s introduce some facts. Total paid is currently only US $1.1 billion — half that expected — which implies it was not as big an issue as first thought. Of those settlement dollars, 40 percent were paid because of ruptures. Based on the stories I heard, I did not even consider that part of the settlement issue.

(And a quick aside. Did you notice anything in particular about the preceding paragraph? Rather than quote statistics and facts — although some are included — I provided you a story to support my case that we rely on stories too strongly.)

Now, I’m not trying to turn this into a debate about the breast implant issue. Rather, I’m using it as an example (a story) of how the use of story versus facts can slant our thinking. We live in times where we are inundated with information — some of it actually related to the significant decisions that are being made. As I listen to the news, I hear rhetoric from all sides on each of these issues — and most of that rhetoric is based on stories. (Let’s not even broach the subject of using false facts.) That doesn’t mean that the story isn’t true. But it does mean that it is just a story and may not necessarily reflect the entire reality. Unfortunately, true or not, those stories are driving people’s decisions on those issues.

But, I’m running short of space and time, so let’s bring this home. As auditors, we do a pretty darn good job of depending on facts over story. However, ask yourself how often you have used discussion and interview to lead you to the conclusion that a full test was not necessary? Not, in and of itself, a problem (making such decisions is why we get the big bucks). But following from that, as you look back, were you actually using stories to supplant facts? Applying this one aspect of critical thinking in all your listening activities will not only cause you to make better decisions, it will also help you to be a better auditor.


Posted on Nov 11, 2009 by Mike Jacka

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