Why psychology beats forecasting, every time!

13 Feb 2019

“We thought that as our tornado forecasting got better, we would save more lives. We didn’t. We knew more than ever about tornadoes, but nothing about how the American people responded to tornado warnings.”

 

Psychology beats forecasting every-time.


This quote is from the Michael Lewis book, “The Fifth Risk”; one of his follow ups to best sellers Money Ball and The Big Short. If you haven’t read it yet I would recommend it. You will have to excuse me but the quote is paraphrased, but I think it captures the essence of the story.

 

The main subject of the book is the impact of the Trump administration on the machinery of the US Government, and on this subject alone it makes an interesting read. But the book is also a celebration of some of the most passionate and dedicated people within that government and their amazing stories.

This particular story about tornado forecasting particularly caught my eye. NOAA (the National Oceanic and Atmospheric Administration) is a scientific agency within the American Government that focuses on the conditions of the oceans, waterways and atmosphere. One of the areas it focuses on is weather forecasts and one element of this is tornado forecasting. 

 

In the US there are over 80 deaths and 1,500 injuries relating to tornadoes each year. There was an assumption underpinning all the work that the NOAA scientists did that as their ability to predict tornadoes got better they would save more lives. That by giving people precious minutes of warning they would get to safety before disaster struck. 

 

However, people ignored the warnings.

 

Human insight is the new currency for decision makers

The reason for this came down to psychology. More specifically, people’s belief that tornado damage was something that happened in other places, to other people. Because it had never happened to them before they discounted the probability that it would happen to them in the future, trusting their own judgement over the warnings. This is an example of availability bias. A shortcut to decision making that relies on the mental availability of examples when estimating the probability of something happening to you.

What the scientists at NOAA realised was that improving the science and technology of tornado forecasting was not enough. They had to ‘get into the minds of the American people’ and improve their understanding of the psychology of how people respond to Tornado warning.

I think there is a parallel of this story for the Insight and Branding world. We are experiencing significant advances in data analytics and AI technology at a time when large volumes of high value data is available. This is allowing us to uncover patterns and develop predictions for the brand and marketing space that has never been possible before.

 

But what is the value of this understanding if our knowledge of the psychology of how it can be applied does not keep pace?

 

The danger is that we create a huge wealth of information that fails to have an impact because the Insight industry doesn’t embrace it. Decision makers fail to act on it and therefore we are unable to bridge the gap between what it is telling us and the real lives of the people for whom we create products and services.

 

My belief is that more needs to be done to bring the science of data analytics and the the science of people closer together. For expertise in AI and expertise in people to work hand in hand. Until this happens we won’t realise the true potential of the data and AI revolution.

 

If you’re interested in finding out more about how AI can help us be more human then get in touch with us at Discover.ai.

 

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Written by Jonathan Williams
25+ years in the insight and brand strategy industry as a consultant, company director, and entrepreneur.

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