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Clear Thinking Case Study of the Month


  

The Story

Dec/Jan 2013

“Facts versus Assumptions - Hewlett Packard and Autonomy; Plebgate and Plodgate - what went so badly wrong?” 

One problem – two telling examples. The difficulty many people have in focusing their minds on the facts – Facts Thinking – and being aware of assumptions being made. In HP’s case, they wrote off a massive £5.5bn after buying the British software company Autonomy for £7bn. A huge error of Facts Thinking on the value, and assumed fit, of their acquisition.

Plebgate was the name given to the hounding of Andrew Mitchell, former Government Chief Whip, after he reputedly swore at police guarding No. 10 Downing Street, calling them Plebs because they refused to open the gates for him and his bicycle. Plodgate refers to the sudden switching of opinion when it was discovered that the evidence was highly suspect and partially contrived by the police, according to a TV report.             

Key points of the Story

Is that a Fact or an Assumption?

In both cases, the teams that made their decisions were basing those decisions on unproven facts. HP calculated a value of Autonomy which turned out to be far from realistic. They also, presumably, made the assumption that most of Autonomy’s staff would stay with the company. Instead, within 12 months, HP had to place a value on the Autonomy business of only £2.5bn, a huge paper loss. And hundreds of Autonomy staff left, including Mike Lynch, the driving force.

But what did he say?

 

Andrew Mitchell lost his cabinet post because many people took the view that he probably did call the police at the gates Plebs and he couldn’t prove that he hadn’t. He didn’t help himself by refusing to say exactly what he had said. The Police Federation caused such a furore that ultimately ministers forced a resignation situation. All based on assumptions – and a lack of forensic examination of the factual evidence that did exist in the form of closed-circuit video camera footage.

It took a TV company, Channel 4 News, to carry out research that showed that so-called public witness evidence was actually by a policeman who wasn’t even at the scene, and that the time required for the alleged conversation was significantly longer than indicated by the video footage.

 

Analysis and Lessons

Facts Thinking … Assumptions … Emotions Thinking … Polar Opposite Thinking Styles … 11 tips for Facts  Thinking Culture Fit … Creativity … Drawing Conclusions

Facts Thinking requires focus on the facts – not easy

Facts Thinking is focussing purely on the facts. Most people find this difficult to do simply because they don’t usually focus their minds on any specific Thinking Style, never mind the single Style of Facts. As a  result their minds can be easily manipulated or diverted without them even being aware of it.

The polar opposite Thinking Style to Facts Thinking is Emotions Thinking. In order to focus on facts it is essential to be aware of emotions, your own and others’. This means that to focus on facts it is necessary to switch constantly between Facts Thinking and Emotions Thinking and identify which is relevant at any point.

What is a Fact?

A Fact is a statement of accepted, reliably proven truth. In both the HP/Autonomy case and the Plebgate situation, the so-called facts are now doubted. In both cases, much of what was taken as, or assumed to be true, turned out to be costly, incorrect assumptions.

Eleven tips to aid Facts Thinking

We have identified a method of helping to focus on the facts. This is part of our Descriptors for describing what a specific Thinking Style is and How to do it. For Facts Thinking, ‘How to do it’ includes 11 tips such as “Clarify and define the topic and objectives” and “Check for alternative interpretations”.

HP’s £5bn Facts Thinking error No 1

HP claim that Autonomy were less than open with real sales facts when they presented their accounts to be subjected to scrutiny at the due diligence stage of acquisition. But it is hard to imagine that it has taken 12 months of scrutiny to find such significant irregularities that could cause a massive drop in sales and profits at the division. Especially as HP used top accountants to study Autonomy’s books prior to purchase.

HP’s £5bn Facts Thinking error No 2

HP seems to have made the dangerous assumption that Autonomy’s staff would happily work under the very different culture at HP. Hewlett Packard are a large, highly organised company. Every aspect of the business has rules and procedures and people are expected to adhere to them. Autonomy probably has an entirely different culture. They are a more creative business, hiring creative people. Creative people don’t like rules and procedures. That is a Fact. They believe creativity comes from breaking rules, which is a valid technique.

This acquisition turned out to be a gamble, both in financial terms and in cultural fit. We suspect that HP would have benefited greatly by focusing their teams’ minds on Facts Thinking.

The Plebgate Assumptions 

When the story came out and the press went to town with pictures of a very earnest and sophisticated Andrew Mitchell pushing his bike it must have been hard for the general public to sympathise with him. Most people assume that the police are reasonably honest and trustworthy. However, politicians are renowned for their skills in evading the truth if it suits their situation. And Conservative politicians are often thought to be ‘aristocratic’. There is a terrific line in the movie “Thatcher” where one cabinet minister says to a colleague after a bruising session with the PM: “I wouldn’t speak to my gamekeeper like that!”

Analysing the Facts, the evidence

The evidence of the CCTV video footage is an interesting situation. Sir Jeremy Heywood, the Cabinet Secretary, was tasked with analysing this evidence but concluded that it was ‘inconclusive’. That is, it was impossible to be sure what happened. It is strange, and sad, that the Channel 4 News programme was willing to examine the ‘facts’ and cast doubts on police evidence whereas the No 10 team felt unable to do so. It must be difficult to criticise the people whose job it is to protect you.

 


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