There is in fact a large difference between knowing the facts and getting the right answer. Just last week, for example, I was presenting an investment opportunity to the board of one of my clients, Dubuis Corp. In this circumstance, the right answer is not that all the facts are right, although I hope they are. The right answer is that Dubuis Corp will go ahead and make the investment.

 

The first half of my presentation focused on the economics of the transaction. I covered the usual topics of how much it would cost, how much it would produce in the first few years, the effect on their share price, and so on.

At the end of the financial section I could see clearly from my audience's body language that they were unconvinced. At least three of them were not even looking at me. But I had much more material.

The second half of the presentation, what I would call the non-factual part of the pitch, or the non-evidence-based part, had five headings: environmental management, sustainability, workplace diversity, social impact and cultural enhancement.

The financial section had taken a team of analysts weeks to prepare. The second section we pretty much put together the night before. It was full of comments about how the acquisition might be perceived in the media, how the cultural mix of the combined company could be changed, and a lot of bullet points on how minimal the facility's impact would be on the environment. Not much of it was based on any real evidence, and not much of it was stated in the form of hard facts, but it sure was persuasive. The final vote: 8-0 in favour of the acquisition.

This is one of the unfortunate realities of business: knowing the facts is nowhere near as useful as knowing what will convince people. But knowing that it is usually not facts that are persuasive is the most important lesson.

This becomes plainly obvious in social settings. Say you are a young, single man and you are looking to meet a young, single woman. In a social setting you are quite likely to encounter an apparently suitable woman who will tell you that she is a Taurus or an Aquarius. Young women with an interest in astrology, at least as a conversation starter, are not uncommon. She would probably be expecting you to tell her what your star sign is.

You might, instead, decide to inform her of the facts: "Astrology is simply a widespread delusion that the position of the earth relative to an arbitrary collection of solar bodies at the time of your birth somehow affects your personality." Now this would be correct, but it's unlikely to result in you getting her phone number.

I come across this problem quite commonly at dinner parties among bankers or among those who are married to bankers. There is invariably someone who will take the first opportunity to gushingly recount the story of their fantastic experience with reflexology or acupuncture or ear-candling or crystals or some other form of non-medical medicine. When someone starts in on a topic like this, I am normally the only one in the room not nodding and uttering approving remarks.

Being equipped with the facts is very unhelpful in this situation, at least if you want to be invited to more dinner parties.

Quite recently, for example, I was subjected to a lengthy discussion on how homeopathy helps treat migraines. Having had a bit too much to drink to take the option of biting my tongue or perhaps excusing myself, I drunkenly thought the group might be interested in hearing a different perspective, based on facts.

"Did you know that homeopathy was invented by a German physician in the 1700s, before the germ theory of disease was understood, when relatively little was known about human anatomy?" I asked the slightly dumbfounded audience.

"Or that homeopathy is based on the implausible idea that questionably effective ingredients become therapeutic after they have been diluted in water so much so that nothing remains of the original ingredient in the so-called remedy?"

This prompted a slight pause, into which I added: "Homeopathy, like so many alternative medicines is not supported by evidence that it is any more effective than a placebo." And just to drive the point home conclusively: "Do you know what alternative medicines are called if they are proven to be effective? Medicine."

After another slight pause, one of the other dinner guests, after giving me a nasty but pitying look, turned back to the group asking: "Could you give me the name of your homeopath? I have been having some terrible migraines myself."