When People Outperform Data

People who succeed via analysis of numbers and facts need to learn that understanding of people can make that analysis unnecessary and can even outperform it.

Examples:

1. Amazon did not make money between its 1994 founding through 2002. There was no financial or business fundamentals analysis that could’ve led you to buying the stock, which would launch AWS and FBA in 2006. The only way you could’ve profited from the 4000x share price growth between Dec 31 2002 and today was to figure out that Bezos was one of the greatest of all time and was pouring his best years into the company.

2. I was once doing a reference check for a new employee. You can make a quantifiable prediction of employee quality by creating a points system for traits correlated with future work quality. On paper this employee did not appear to be so great, however his reference, who was an accomplished businessman in his own right without an agenda stopped me and said “Hire this guy. Just do it. Trust me.” He was right.

3. Careers and health are complex systems. We can come up with rules of thumb like “work hard” or “exercise”, but, generally we know a lot less about what leads to good outcomes in these fields than we do in chemistry and mathematics where there are higher degrees of predictable certainty. When an older businessperson who has survived and thrived through multiple recessions tells you, someone much younger, less experienced, and successful, to do something like “call them” or “go to this event”, you just need to do it. When your grandmother tells you to stay slim, exercise, and spend time with friends, you just need to do it. There is no fact or data based analysis to support these recommendations, but decades of experience, of seeing people fail in business or die early and those who didn’t, inform these powerful inexplicable recommendations.

Yes, facts and numbers are great, but they will only take you so far.

Master the understanding of people and know when their recommendations outperform what we call rational analysis to go even father.

And note that these two methods are even more powerful when combined.

Trust me.