Using science to make better business decisions

Here’s a note by Alex Edmans:

This new podcast by Stanford’s Jonathan Berk and Wharton’s Jules van Binsbergen is superb. It’s on how to use the scientific method to make better business decisions. Rather than going with our gut, we should form hypotheses, test them with data, and be mindful of confirmation bias when interpreting the results – not latching onto flimsy evidence that supports our views, nor trying to explain away inconvenient truths, but being willing to admit when the data proves us wrong.

It’s called “All Else Equal” because we often make hasty inferences from data forgetting that all else is not equal. If sustainable companies perform better, this needn’t mean that sustainability causes better performance – perhaps a forward thinking CEO improves both sustainability and performance, so CEO quality is not held equal.

First two episodes are with Google CFO Ruth Porat and former NBA general manager Billy King.