Statistical silliness

 
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Over at C-net, under the headline "Survey links CEO approval to stock performance," you can read the following.

"Over the past five years, shares of all the companies whose CEOs had the highest approval ratings were in the black, while shares of all the companies whose CEOs had the lowest approval ratings were either in the red or flat. We're talking 8 of 8 in the black, 8 of 8 in the red or flat. What does that tell you?"

For those of you playing the game at home, the correct answer to that question is: "Nothing."

There's nothing in the statistics to indicate causation. They could mean several things.

They could mean that CEOs who get higher approval ratings inspire the workforce in their company to better performance and higher stock price. But you can't tell from just looking at the numbers.

Or, they could mean that CEOs who lead their company to higher stock price performance get higher ratings from the people in their company. But you can't tell from just looking at the numbers.

Or, they could mean nothing at all. The data could indicate a coincidence, Correlations are fascinating, but they're only the starting point for research and reasoning, not the quick answer.

The big problem with drawing conclusions based on insufficient data or bad reasoning is that you tend to draw the conclusion you want, which sets you off on the road of self-deception.

Wally's Working Supervisor's Support Kit is a collection of information and tools to help working supervisors do a better job. It's based on what Wally's learned in over twenty years of supervisory skills training. Click here to check it out.

 
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Wally Bock has helped people learn to be great bosses for more than a quarter century. His latest book, Performance Talk: The One-on-One Part of Leadership, makes learning key leadership principles almost effortless by teaching through a story and providing lists of resources for further growth.

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