One of the issues I frequently run into is when I discuss risk or future events or what impact a certain action will have, I get usually one of three answers. I am sure it will work, there is no way it’s going to make a difference or I don’t know. All of these options are weak compared to thinking probabilistically. Also, there are also other options not even discussed or considered. For the discussion here, I just want to focus on a future with only 2 mutually exclusive outcomes to make the process and concept easier. In future posts, I would like to explore this part of the process in more detail. I have put this into a pretty simple 3 step process.

Step 1 – Determine what you know about the subject and put a % towards what you think you know. You want to take some time with this to consider all the factors you know. If you don’t know anything or very little, use 50%. If you are very confident and have a lot of knowledge of the issue, may be you are close to 100% or 0% depending on what you think. This step should entail someone slowing down, stay away from the knee-jerk reaction and think about what you know, the circumstances of the issues at hand and the people at the table.

Step 2 – As information becomes available, modify your assumptions and potentially change the %. This means as time goes on, items related to the event or issues are changing, be aware of these changes and quantify them as best you can.

Step 3 – After the event occurs, review what you have learned. Would you have put the % initially knowing what you know now? This is not the statement; I would be 100% solid on this because I know who wins. It is more like what other information should I review before setting my starting point? What part of the process did I follow and what I didn’t.

I will be using the 2016 NBA Finals as an exercise using me as the protagonist. I will be the first one to tell you I don’t watch much NBA basketball but being from Cleveland and watching how they were beat by the Golden State Warriors in 2015, I wanted to see how well they would do and use my limited knowledge of the game to work this process out.

I want to make sure

Step 1 – Come up with an initial percentage. Let’s look at the Cav’s winning the NBA Finals. Some ground rules

If you know nothing about the subject, use 50%. This means that a flip of a coin is just as accurate as your guess.

Stay away from 0 and 100% unless you are absolutely certain of the outcome

For the Cavs vs. Golden State finals, before they started, I figured the Cavs had about a 35% chance of winning. Here was my thought process for this:

I worked from a 50%, flip of a coin, process because I recognized I don’t know much about basketball

From 50%, I knew the following items though the percentages are pretty arbitrary.

Golden state had home court advantage – about 10%

Golden State had the best record – about 10%

Golden State had just come back from a 3-1 deficit to win the west – about 5%. That gives the Cavs about 25% chance.

Cavs were rested and everyone was healthy – about 10%. That moves it back to 35% chance.

The Golden State Warriors win the first 2 games – That moved me to 10% from 35%. I just couldn’t see them winning it all though I believed they could win at least one game

Cavs win a game at home – big. Move up to 20%. This was an improvement over the 10% not so much that they won because I thought they could win one, it was more around how many points they beat them by.

Cavs lose at home – Less than 5%. At this point, the Cavs were down 3-1, the team had to win in Golden State twice and there had only been 2 other teams in history to get to a game seven and no one had ever won the Finals when they were down by 3-1.

Cavs win in Golden State – Move to 25%. This 20% move was due to the point spread in the win in Golden State, and the motivation and momentum for the Cavs. Also, the Cavs were coming home and I thought they could win game six as well.

Cavs win big in Cleveland Game 6 – Move to 35%. I only moved 10% because the Cavs still had to go back to Golden State and the starters played the whole game 6. The Cavs won big in this game but I figured that they didn’t leave anything in the tank for game 7.

Cavs at the start of the second half.  35% they were down by 8 at this point and though they looked pretty good in the second quarter, they were still losing.

Cavs end of 3rd quarter – 40% – The Cavs played great during the third quarter but they were still down by one. I could not help thinking that they had given everything they could and were still coming up short.

7 minutes left – 50%. It was a very tough quarter. Each team would have a lead and then they would be even up. This happened several times in the fourth quarter. Now someone may say that this means I didn’t know anything like I stated at the beginning of the discussion. This one is a little different because of the way I arrived at the number. I was now adding and subtracting percentages based on what I was sing. The fact that it came up to 50% was a coincidence.

5 minutes left – 50%. This was the hardest call. Both teams looked exhausted. Each team would drag down the court, wait until there was less than 10 seconds on the clock and then try to get the ball in the basket. There were errors and fouls on both sides and I didn’t make any changes. At this point, I thought either team could win.

50 seconds left – 70%. This jumped 20 points because of the Kyrie Irving 3 pointer with 50.6 s left. Not only were the Cavs up by 3, Kyrie still looked fresh where everyone else on the court looked punch drunk.

10.6 seconds left – 75% – This is when LeBron got fouled going to the basket. I only jumped it by 5% because LeBron was down on the court grabbing his wrist / elbow and was not getting up. Also, he may be unable to make the two free throws needed to put the game away. He missed the first one and then made the second. 4 point game but that is just a 3 and a foul away.

4 second left – 80%. I know, I know, there wasn’t much time left at this point but Curry had the ball and Kevin Love was guarding him. Kevin had done a great job earlier in this game as well as the regular season and some of the other play-off series but in this series, other than game 7, he has had limited impact. I was concerned he was going to foul Curry as he went up for a 3 pointer.

Buzzer – 90%. This is a joke, sort of. I still couldn’t believe that the Cavs had won. This is my point about personal bias. My bias based on all the history that I had been through with the teams of Cleveland; I was still struggling to take it all in.

After review, would I have done something different than the 35%? I saw at least a couple of predictions that stated the Cavs had a 25% chance of winning when I thought 35%. I don’t think I would have changed my percentage but I would do more independent research as well as reflect and discount my biases a little more but I think I would have posted a 35%.

Now think about this process and how you could use it as well as think about those around you. When you come up with an idea for something that is novel or unique and have to get people behind it, whether they know it or not, they will have to go through this process. It is an epistemological question. What does the individual need to convince him that this is the way to go? Sometimes they may not be able to tell you. Remember they are coming from a vested interest, naming themselves and it is hard to move away from you to improve your opinions, options and questions.

3 rules:

Review what you know and pick a percentage

As information becomes available modify your percentage

Once the event passes, review what you did and how you thought. What would you do differently and what did you leave out?

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