Monday, February 4, 2013

The Purpose of Business Analysis

For the last two years I have been engaged in a long exploration of value. If you've read my "Understanding the Business Analysis Core Concept Model™(BACCM)" column in the BA Connection Newsletter (with articles in October, November, December, and January so far) you'll know that this has translated into many thousands of words about value — what it is, and what it is not.

There has been a lot of reading along the way — philosophical works on the nature of value, economic treatments of the subject, and moral / ethical / social descriptions of what value should be. Each of these approaches has something to say about the thing we call value, but none of them does a good job of describing actual human behaviour. Recent scientific work, however, has shown some real promise. Behavioural economics is still a young field, and is a loooong way from Asimov's psychohistory — but it makes better predictions about how people behave than the other approaches do.  

A big part of this research (and brain science in general) is the exploration of cognitive biases. We have a lot of them, and many are quite well documented (see the wikipedia entry on the subject). These are facts of our existence.

Daniel Kahneman, along with Amos Tversky, introduced the concept of 'cognitive bias' to the world in 1972, helping to spark a new kind of exploration of human behaviour. In his book Thinking, Fast and Slow, Kahneman introduces a theory to tie together many biases, such as overconfidence, loss aversion, framing, and sunk-cost. He calls it 'What You See Is All There Is', or WYSIATI. (He uses the phrase so much that he abbreviates it in the text. There's an interesting review of his work, called 'A machine for jumping to conclusions' on the APA site.) WYSIATI states that human decisions rarely account for anything beyond the most obvious information. Our brains are very efficient ‑ or lazy ‑ and must be provoked into accounting for more than the immediate context.

WYSIATI is an enormously adaptive heuristic for dealing with an uncertain world in the short term. and a tremendously inefficient way for dealing with a predictable world in the long term. Humans live a long time, and have a long view of history and the future. Over the millennia, we have developed tools to compensate for WYSIATI — tools that provoke our species to act rationally. 

Our species has developed many such tools, in different contexts. The scientific method is arguably the most successful on a historical, global scale. Organizations have many approaches, such as following processes, establishing and obeying rules, working within frameworks, and using techniques. If you consider the 34 techniques in A Guide to the Business Analysis Body of Knowledge® (BABOK® Guide) version 2 in this light, you will find that all of them have elements that force us to consider more than what is obvious. They make us take what we see before us, put it in the context of what we know, and consider what we don't know. With some techniques the relationship to WYSIATI is obvious: 9.32 SWOT Analysis, 9.24 Risk Analysis, and 9.25 Root Cause Analysis, for example. With others — particularly those with lots of stakeholder interaction, such as 9.14 Interviews — the technique is itself a defense against WYSIATI.

Bottom Line

Business Analysis is one tool that humans use to compensate for WYSIATI.

...What do you think?

No comments: