Bart de Langhe

Philip Fernbach

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">Idea in Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Problem</h5>
  <p>We all think categorically, and for good reason: It helps us make sense of the world. But in business, categorical thinking can lead to major errors in decision making.</p>
  <h5>The Fallout</h5>
  <p>When we categorize, we <em>compress</em> category members, treating them as if they’re more alike than they are; we <em>amplify</em> differences across categories; we <em>discriminate,</em> favoring certain categories over others; and we <em>fossilize,</em> acting as if the structures we’ve imposed are static.</p>
  <h5>The Solution</h5>
  <p>Thoughtful leaders can avoid the harm that comes from categorical thinking in four ways: by ensuring that everybody understands the dangers of categorization, by developing ways to analyze data continuously, by questioning decision-making criteria, and by actively “de-fossilizing” categories.</p>
 </div>
</article-ideainbrief><p>Say <em>ta.</em> Say <em>da.</em> Now repeat the sounds, in each case paying attention to how you’re making them in your mouth. What’s the difference?</p>

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<p>Human beings are categorization machines, taking in voluminous amounts of messy data and then simplifying and structuring it. That&#8217;s how we make sense of the world and communicate our ideas to others. But according to the authors, categorization comes so naturally to us that we often see categories where none exist. That warps our view of the world and harms our ability to make sound decisions&#8212;a phenomenon that should be of special concern to any business that relies on data collection and analysis for decision making. Categorical thinking, the authors argue, creates four dangerous consequences. When we categorize, we <em>compress</em> category members, treating them as more alike than they are; we <em>amplify</em> differences between members of different categories; we <em>discriminate,</em> favoring certain categories over others; and we <em>fossilize,</em> treating the categorical structure we&#8217;ve imposed as static. In the years ahead, companies will have to focus attention on how best to mitigate those consequences.</p>

The Dangers of Categorical Thinking

Human beings are categorization machines, taking in voluminous amounts of messy data and then simplifying and structuring it. That’s how we make sense of the world and communicate our ideas to others. But according to the authors, categorization comes so naturally to us that we often see categories where none exist. That warps our view of the world and harms our ability to make sound decisions—a phenomenon that should be of special concern to any business that relies on data collection and analysis for decision making. Categorical thinking, the authors argue, creates four dangerous consequences. When we categorize, we compress category members, treating them as more alike than they are; we amplify differences between members of different categories; we discriminate, favoring certain categories over others; and we fossilize, treating the categorical structure we’ve imposed as static. In the years ahead, companies will have to focus attention on how best to mitigate those consequences.

The Dangers of Categorical Thinking

Summary.

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