The Generalisation Trap

Don’t you just love it when when you hear statements like “the millennial generation are different, they don’t want what we want.” Excuse me but don’t they want peace, prosperity, rising health and education standards, and a better quality of life? Generalisations are the lazy and intellectually dishonest way to make sense of the world we live in.

The same holds true about different types of ownership. “Ah, private equity ownership confers being a slave to an accountant” or “VC’s want your sole and to eat it”. Yet the PE and VC ecosystem is a very broach church. There are firms and partners (EQT, Sequoia and JZI Capital), whose track record of long-term investment, high levels of engagement with top management and collaborative success is far preferable to trade investors.  Indeed, they might look, speak and act much more like an investment fund.

Different forms of capital: The oft repeated one in today’s reinsurance business “the Pension Funds and the Insurance Linked Securities providers are unproven capital”. Sorry but these folks are mostly highly conservative people, whose investment bets in other asset classes dwarf the minuscule reinsurance sector. Indeed, they have hired many of the very same experts who the traditional reinsurance sector has relied on for smart underwriting decisions.

Doing business in different countries: “Americans are more direct and will not beat about the bush. Brits dance around the tough issues”. Sure, there are US clients, business partners and colleagues in my 25 year career that have those behavioural traits but there are a great many analytic and amiable characters, who in a negotiation or client relationship are highly prone to avoid confrontation and join the list of world champion procrastinators.

My point here is be careful generalising your way into an intellectually dumb corner. Come with hard evidence or strong anecdotal information and carefully apply it to a particular situation.  “Ah the Spanish, it is always mañana”

© James Berkeley 2015. All Rights Reserved.



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