The Generalist Advantage

When seeking to retain a consultant, managers usually ask about the consultant’s industry or subject matter expertise. Implicit in this question is the assumption that those with subject matter expertise offer more critical thinking than generalists.

While it may seem counterintuitive, people with deep subject matter expertise are typically not the best consultants. Among the reasons that specialists are often not the best consultants are:

  • Specialists believe that the course of action is obvious and therefore not worthy of extended contemplation. As Abraham Maslow said, “If you only have a hammer, you tend to see every problem as a nail.” People with deep subject matter expertise tend to rapidly formulate conclusions and spend the rest of the review looking for confirmation data and advocating their viewpoints.
  • Specialists tend to give short-shift to ideas that do not conform to their pre-conceived notions. Specialists tend to congregate among themselves and this insularity results in a rigidity of thinking as to where solutions to problems lie.
  • Specialists often believe that the correct course of action lies at the intersection of their expertise. Admitting that the solution lies elsewhere would effectively repudiate one’s investment in developing such expertise.
  • Specialists often are quick to want to demonstrate their expertise, often to impress (potential) clients. Frequently, they have a vested interest in encouraging clients to accept their advice because they have related services to sell.
  • The advice of specialists can seem removed from the situation at hand. It can appear to be prescribed from above and thus less likely to be implemented. Generalists are more likely to provide common sense recommendations which are more likely to be implemented.

Practical Application As a partner in the Paris office of Bridgepoint, a leading international private equity firm, Benoit Bassi must often compete for acquisition targets with companies that operate in the respective industries. Thus, in conducting due diligence on companies that he may wish to acquire, Mr. Bassi is a generalist while his competitors are subject matter experts. However, Mr. Bassi does a fine job of articulating the advantage that he has as a generalist in conducting his due diligence. ”When you work for a corporation and you buy something you think is in your core business or fits with your core business, you assume you know what you are buying. By contrast, private equity investors have to rediscover everything. There can be a certain arrogance in corporations which causes them to make silly mistakes.”

Historian Doris Kearns Goodwin made a profound point about the benefits of intellectual diversity in Team of Rivals, her history of Abraham Lincoln’s cabinet. Ms. Goodwin argued that it was Lincoln’s ability to deal with competing viewpoints that made him such a remarkable president and leader. Also, during Cabinet level meetings President Kennedy encouraged everyone to speak about all issues and issued carte blanche to everyone in attendance to challenge the experts.

Academic Support University of California at Berkley professor Phillip Tetlock ran studies on what he later called the “fox and hedgehog difference” in types of predictions. The name came from the famous assertion by the British philosopher Isaiah Berlin that there were two kinds of thinkers in the world: hedgehogs, who know one big thing; and, foxes, who dart from idea to idea.

Tetlock and his team interviewed hundreds of “experts” on subjects such as economics, and politics and asked them to make predictions about the short-term future (the next five years). Then they divided the subjects of the study into a number of categories: optimists and pessimists, left and right political orientation, foxes and hedgehogs.

After some time had passed, Tetlock’s team reviewed the prediction sheets to see who was most often right. They found that the only reliable predictor was the one that divided foxes and hedgehogs. The problem with thinkers who know ‘one big thing’ is that they aggressively extend the explanatory reach of that one big thing into new domains. On the other hand, foxes were skeptical of easy historical analogies. Foxes also they tended to be more probabilistic in their thinking and they were comfortable updating their models.

According to Professor Tetlock’s research, a fundamental problem with specialists or hedgehogs is that they are too eager for closure. They stick with one big idea precisely because they want to know it completely, to have the sensation of reaching a total and final understanding. Another finding from Professor Tetlock is that fox thinkers are more likely to study their own decision-making processes and such introspection is the best predictor of good judgment.

 

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