One of the first lessons every first-year at McKinsey is taught is the difference between a fact and an opinion.
The worst thing you could do at McKinsey was present an opinion as if it were fact.
If you did this in front of a partner, the partner would never want you on another project.
If you did this in front of a client, there would be closed-door conversations as to whether you should be fired or not, and it was nearly a foregone conclusion that you would not be promoted at the next promotion cycle.
In other words, it’s a big freakin' deal at McKinsey to get facts and opinions mixed up.
Some of the employees in a client organization resent McKinsey’s presence in the company. At best, they’re skeptical of McKinsey’s value. At worst, they are openly hostile to consultants.
These critics are looking for a way to discredit McKinsey’s work. The easiest way to do that is to find a flaw in the firm’s work.
The easiest one to identify is when a new consultant passes along his or her opinion as if it were a verifiable fact or a conclusion based on facts.
Such an action has the power to discredit the firm’s work and harm its reputation.
When I was at McKinsey, I was surprised at how often people outside of McKinsey mixed up fact and opinion.
Today, on social media especially, I’m even more surprised how often facts and opinions are swapped.
A fact is something that is verifiably true.
An opinion is something you think is or might be true.
At McKinsey, we had another word we used to describe opinions. We called them hypotheses.
It’s also worth noting that sometimes people express an opinion with such conviction and confidence in order to portray the opinion as fact.
Saying “2 + 2 = 6” with incredible confidence and conviction does not change an opinion into a fact. The delivery of the message has no bearing on its actual accuracy.
Being able to distinguish between facts and opinions is a useful skill for aspiring executives.
The first skill is being clear on whether what you’re thinking, saying, or feeling is a fact or an opinion.
The second skill is being able to see clearly when people portray their opinions as facts, so you can see it for what it really is... an opinion.
This is why you’ll see good CEOs ask a lot of “why” questions.
Direct Report: “We should offer XYZ product to ABC customer.”
CEO: “Okay, why do you say that?”
"Why" questions prompt the other person to either share facts and rationale that lead to the conclusion or reveal that what was said is merely an unverified opinion.
As an aspiring executive, it’s important that you’re absolutely clear on the difference.
In emerging markets and startup companies that have no history, sometimes all you have to go on are opinions because there are no facts available on customers, competitors, or the marketplace.
In more established markets and businesses, there’s a lot more data. Opinions can be tested as hypotheses to determine their validity. Doing so takes a lot of risk out of decision making and improves your ratio of good decisions to bad.
To make successful decisions based on opinion, you’re primarily relying on luck.
To make successful decisions based on facts, you’re relying on logic and analysis.
It’s important to know which kind of decision you’re making.
To be clear, good executives do make both kinds of decisions. However, they don't confuse one for the other.
When you’re relying on luck to be right, you do so by minimizing your downside risk. You do a market test, create a pilot project, or release a product as a beta test. The more attempts you get to be lucky, the more likely you are to get it right at some point.
There’s a saying in the venture capital world that “it’s better to be lucky than to be smart.”
Personally, I like the idea of being both lucky and smart.