Given the sheer number of decisions we face every moment of every day, we have to make assumptions. Will that driver come to a full stop or run the light? Will my partner show up on time or be late again? Will our kids’ schedules be the same as last month – or different?
In business settings, assumptions play an enormous role. We assume certain things about future trends and how they will affect our business. We assume we understand our customers. We make assumptions about people’s capabilities.
We also make assumptions about how to solve problems. Some people assume that more analysis will yield a better result. Some assume their gut instinct is as good a gauge as any. Others assume they know what the actual problem is – without having done enough homework to find out.
This blog lays out some well-known examples of the hidden assumptions we make – and offers some techniques to navigate them.
How the Brain Works to Reinforce Assumptions
Let’s start with the premise that we make assumptions all the time. Various mechanisms in our brains are thought to reinforce the assumptions we make – and lead us to sometimes erroneous conclusions. Four of those mechanisms are briefly covered below:
Confirmation bias: Our brains are wired to search for, interpret and recall information that supports our previously held beliefs, values and assumptions. This phenomenon, which psychologists refer to as confirmation bias, or anchoring bias, causes us to ignore data that conflicts with our assumptions.
When we make an assumption or state a conclusion and then hear data that doesn’t support that assumption, we can get caught in a self-justifying feedback loop, where we turn a blind eye to the facts or data that do not reinforce our previous statements or assumptions. This is particularly risky in the medical world, where a doctor may make a diagnosis and then cling to it, even in the face of evidence that it was incorrect. A classic example in the business world is when a manager clings to the hope that a troublesome employee can change – even in the face of mounting evidence that he is having a negative impact.
The brain’s knack for filtering out data that doesn’t support our conclusions is linked to cognitive dissonance, which occurs when we are confronted with two conflicting streams of thought. Coping with conflicting ideas causes psychological stress. In order to bring down our levels of stress, we weed out the evidence or avoid the information that causes the dissonance
Another typical form of bias is known as availability or recency bias. It occurs when we rely on information that immediately comes to mind or is easily available to make decisions or judgments. It might be a recent conversation, or something you just read or saw. These bits of information can cause our brains to take a cognitive shortcut in reaching a decision or conclusion. Coupled with confirmation bias, it can cause us to “double down” on judgments or conclusions not rooted in fact or limited in perspective and be less open to alternative viewpoints.
A final dynamic that’s important to understand is the assumption of competence. Studies show that we tend to perceive ourselves as more competent and infallible, not prone to error, than we really are. This assumption of our competence is thought to have played an ancient role in our survival by helping early human beings feel in control – for example when hunting wooly mammoths! – even when we are not. Today, it can result in self-justifying feedback loops, where we assume we know more than we do, have a better memory of what has occurred, or have more power to affect a situation than we do.
The Circle of Assumptions: Navigating Our Hidden Assumptions
Effective leaders recognize these neural phenomena and consciously try to mitigate their nefarious effects. They practice asking for mor information, asking for people to challenge their assumptions, and demonstrate they are open to changing their minds.
One tool that can be handy in the quest for better decision-making is the Circle of Assumptions. It teaches us to always search for the underlying data or information that leads ourselves or other people to reach a particular conclusion.
| Ring | Definition |
| Data | Observable data and experiences, as a camera might record them. |
| Interpretations | Data we select from what we observe, often based on our own beliefs and other filtering systems. |
| Evaluations | Value judgments and meanings that we add, often laden with emotion. Words like “right” and “wrong” or “good” and “bad” creep into our language. |
| Conclusions | Statements that indicate our mind is made up. Over time, our conclusions become the basis for our beliefs. |
| Actions | Decisions reached and steps taken. |
As the arrows in the diagram above indicate, there are many steps we go through on the journey from data to decision-making. We interpret or filter the data, we evaluate its importance, we reach conclusions, and then make decisions – often in a split second. This diagram enables us to see how our eventual conclusions are influenced by each step along the way. It also enables us to see how our decisions can be distorted by our failure to ask enough questions and to be aware of – and challenge – our assumptions at each ring of the circle.
Here’s an example:
An up-and-coming lawyer believed she had been promised a certain amount of business when relocating from New York to California to join a new firm. She heard the other partners promise a “significant book of business” in exchange for her buying into the firm and becoming a full partner. She interpreted this commitment to be made in good faith, she evaluated it in comparison to her current earnings (she was not a partner in her current firm), and she reached the conclusion that she wanted to make the move. She then did so, buying into the new firm for a price of $800,000.
As events unfolded over the next two years, she did not generate the revenue she expected. In trying to sort out what happened, the other partners recalled their initial discussion with her differently. They believed that no binding commitment was made to a specific number of clients or specific revenue. Instead, they recalled telling her that it was a wonderful opportunity to build a significant business in a fast-growing market, and that they would provide an office from which she could build her book of business in exchange for the buy-in. They felt that she did not apply herself diligently to the work needed to build up her practice.
These conflicting accounts boil down to each party making assumptions about the other. There was nothing in writing that said she would receive a specific number of clients or revenue. There were, in the end, only assumptions. Needless to say, there was a lot of bad blood on both sides. She threatened to sue her partners for breach of contract. Ultimately, they agreed to buy back her shares in the business for half of what she paid – in exchange for her leaving the firm and waiving any further liability.
This example reminds us that in order to communicate effectively, we need to be aware of the assumptions we’re making and test them against what we really know versus what we assume. The Circle of Assumptions teaches us to balance inquiry with advocacy – to identify the relevant data before we reach decisions, to keep checking our assumptions, and to ask questions before we reach our conclusions.
Here are some examples of questions to help yourself and other people reflect on their assumptions:
Summary
To solve complex problems or make plans for the future, people need to make assumptions. At the same time, they need to be open to challenging those assumptions in a productive way. The Circle of Assumptions provides a framework to help people develop a set of agreed-upon facts and assumptions. It also teaches us that the most important assumptions to examine are the ones we cling to most dearly.
From a management perspective, this is a skill we need to model ourselves before we can ask it of others. By being curious, by inviting other people to test our assumptions, and by setting the example of asking questions first, we model a behavior that everyone can use in identifying and agreeing on a set of assumptions to use in deciding the best course of action.
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