The Full Montaigne…

We have written before about the decision-making process, because we consider it to be fundamental to the successful management of any business, especially one in which judging and pricing large and complex risks are critical.

In his Essays, Montaigne wrote the following: “We take other men’s knowledge and opinions upon trust; which is an idle and superficial learning. We must make them our own.”

Most people would take this as a statement of the obvious. Yet, think about it: to what extent do you rely upon others, in effect, to form and govern your own opinions? Of course, neither society nor business could function without trust; and few of us are true polymaths, who are expert in a broad range of disciplines, but it is easy to slip into the habit of relying uncritically upon others to do one’s thinking-something which is anathema to us at Awbury.

So, we underwrite thoroughly every transaction that we do. This means that we need to be sure that not only are we asking the right questions and identifying the key issues and risks; but also that we are not asking the ones that are irrelevant or otiose, even if having a bit more information may seem comforting. Quality, not quantity!

How then do we process what can range from seemingly straightforward datasets to the inordinately large and sometimes imprecise? We work as a team and allocate tasks according to expertise and experience (as we said, we are not polymaths!), without indulging in debates about who “should” do something.

Next, we bring to bear the fact that each member of our team has a different range of experiences and education; and will look at a particular issue or problem in a slightly different way, without any concern about that way being the “best” or the “only” way to do so, using a range of mental models. The outcome is a form of what is called Consilience Thinking, as defined by the Cambridge philosopher, Whewell, in the 1840s: “The Consilience of Inductions takes place when an Induction, obtained from one class of facts, coincides with an Induction obtained from another different class. Thus Consilience is a test of the truth of the Theory in which it occurs”. While the facts may the same, they are examined by disparate intellects; such that, if the conclusion reached is essentially the same, it is reasonable to think that the judgement and resulting decision are appropriate.

Note: this is not in any way the same as that bane of organizations and committees: “groupthink”. Each member of the team is entirely free, and encouraged, to challenge the “received wisdom”. We trust each other, but we form our own opinions. Similarly, our partners trust us, but we also expect and encourage them to form their own opinions; and welcome their input.

Of course, we have no illusions about being infallible- we are human, after all!- but we believe that our approach to underwriting and decision-making should continue to protect us (and thus our partners) from egregious mistakes and manifest error.

– The Awbury Team

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