What do you think of when you hear hoofbeats?


What could possibly be the cause of a problem you are facing? How would you diagnose it?

Medical students are taught to be careful about making diagnoses of rare illnesses.

It is easy when you see a patient to remember the unusual illnesses you have encountered that caused the same symptoms as now and jump to the conclusion that your patient has the same disease.

It is likely that there is a simpler reason.

Perhaps this is why many doctors ask you to take a couple of painkillers and come back in two weeks. The chances are that whatever you have isn’t actually that serious.

Dr Theodore Woodward came up with the aphorism “When you hear hoofbeats, think of horses, not zebras” to remind his students to beware of making exotic diagnoses.

But you can use this outside medicine too. Take markets, for example.

Markets are places when buyers and sellers come together. Prices are created through the mechanism of supply and demand and the actions and decisions of participants.

If you want to get a good deal, you need to know what it takes to produce and supply the item you need and calculate its value.

In a one-to-one sale, you may be able to negotiate a good deal. In a financial market, you need to be ready to move when the market price is at a level that is low compared to your calculation of value.

Many things move the market price on a daily basis, but usually a few big things impact how prices work over the longer period – and they boil down to supply and demand.

The trouble most people have with markets is that they feel that they should be active rather than putting a strategy in place and letting it run – the simple passive approach seems too easy, but time after time it produces better results.

In any field, operations, human resources, sales, writing, programming, marketing, research – it is likely that the reasons for a problem are down to common causes.

Before you decide that your phone is knackered or that your computer has been infected with a virus and that’s what is making it slow, you should turn it off and turn it back on again and see if that fixes the problem.

If your marketing isn’t working – the chances are that you are not taking to the right people, or not saying the right things to interest them.

If your writing doesn’t flow, it’s likely that there are four or five main reasons that repeat time after time.

This aphorism also applies when you think about larger issues.

Is it possible that climate change is an elaborate scientific hoax, or is more likely that the current U.S administration’s antipathy towards mitigating climate change is because powerful organizations with a vested interest in the status quo are trying to protect themselves?

That said, context matters.

If you are on safari in the Masai Mara and you hear hoofbeats, you are quite likely to see zebras.

In addition, although you should not reach for an exotic reason immediately, you should also not rule it out until you have evidence to the contrary.

We just need to make an effort to think through the problem as clearly as possible.

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