There’s an old stating that goes, “figures do not lie, however phonies can figure.” In some cases even the figures can spin a complicated story. That’s why I have actually constantly valued the power of understanding data. I even keep in mind motivating my children to take a data class over a calculus course due to the fact that, unlike calculus, I have actually utilized stats practically every day, however I have not utilized calculus because I gladly left differential formulas class in college.
Numerous companies fall in a typical basic mistake when it pertains to examining and associating their own successes and failures. They puzzle connection with causation.
Connection Versus Causation
Let’s begin by specifying our terms. Connection is when 2 products are connected in some method statistically. To put it simply, we can utilize statistics to reveal that these 2 things are connected together with a high rate of likelihood.
Let’s state that when I consume excessive pizza, I feel discomfort in my stomach. The action of consuming a great deal of pizza is extremely associated with me feeling ill.
While these 2 actions are associated, they do not always suggest that the very first action triggered the 2nd. What if, for instance, it ended up that I had Celiac illness– which is an allergic reaction to wheat. In this case, that suggests that it’s due to the fact that the pizza crust was made with wheat which triggered my disease– not that I consumed excessive.
The Connection Trap
A more traditional example of how it’s simple to puzzle connection with causation is that we can statistically show that 97%of individuals who entered an automobile mishap consumed a minimum of one glass of water 24 hours prior to the mishap. There is clear mathematical evidence that consuming a glass of water is extremely associated with vehicle mishaps. We all understand there is no causation to this absurd relationship.
While that example is clear, the similar error is made countless times a day in companies. Analytical analysis is carried out in between an aspect and a result, and a high degree of connection is discovered. This is a case of complicated connection with causation. This comes out when the experiment is scaled based upon those stats and the result isn’t created. Something else was triggering the result, not the non-causal, however associated aspect.
Thanks to the well-known thinker and author John Stuart Mill, who studied the relationship in between connection and causation back in his, A System of Reasoning Ratiocinative and Inductive(1843), there are 3 concerns you can ask to identify causality.
- Do X and Y occasions happen together? Are they constantly taking place together at the very same time?
- X precedes Y. Does Y constantly happen after X has happened?
- There are no other sensible descriptions for the observed XY relationship.
If any of these 3 concerns can’t be responded to in the affirmative, then there is not causation although there might be connection.
Connection in Action
An excellent example of how your company may be complicated connection with causation remains in the world of digital marketing. You may have discovered that you saw a big bump in sales just recently after you released a brand-new Google advertisement or a brand-new material marketing effort. There is plainly a connection in between those 2 occasions. Is there causation?
When you peel back that onion, you may discover that there were a host of ecological elements that entered play– like post-Covid customer need, supply chain concerns, and so on– that were the real motorists for need for your items. None of these are manageable by the marketing group, who will be eager to increase spending plan based on the analytical connection they discovered in between their actions and the increased income.
I dealt with a business that offered house security devices and it was really smart with its marketing. And each time the marketing department put out a brand-new advertisement, they stated it drove sales. Over time, we saw that it was something else totally– like a news story about a riot or a shooting– that led to the boost in sales. The advertisement was just a signboard that informed individuals where to call or click to purchase a system.
Once again, it can be simple to appoint credit or blame to one action or occasion when something else was actually the motorist. That’s why, because security company, our mantra ended up being: connection is not causation!
So, the next time somebody provides an analytical case to you, ask yourself Mill’s 3 concerns to assist drill down and see if there was really causation at work.