First a loud boom, then the bed was shaking, next the young Sarl Cagan found himself awake in the middle of the night, not knowing what had happened.

On the next day, his family drove him a few miles from their house, to see the cause of last night’s commotion. There it was right in front of his eyes, first a crater, then, as he walked closer, a meteor at its center.

That event changed Sarl’s life. He became passionate about astronomy and wanted to study the reason why craters form and why they attract meteors. In his mind, if only he understood the geological process that led to craters, he could prevent meteors from falling to Earth.

By now, you have noticed that there is a problem here: cause and effect are inverted. Meteors cause craters, not the other way around.

Of course, we think that we would never make such mistake ourselves. Or would we? What are situations where cause and effect are confused in the operation of a business?

Let me start with a few examples:

• Building and releasing a product without first validating it with potential customers
• Premature optimization such as growing the engineering or sales team in anticipation of features and company growth, even before product-market fit
• Mistaking raising venture capital with company success
• Implementing a process before truly understanding what it is supposed to address. More often than not the process becomes burdensome and criticized by all, without much to show. (The proponents of such processes are often inoculated from the consequences of their decisions)
• Conclusions that are drawn before the analysis is finished

Misunderstanding between cause and effect is not the only casualty, discernment gets compromised, too. For instance, we used to think that Newton’s theory of gravity—expressed as a force—was correct, until Einstein proposed a better one: Relativity. Steam powered military ships used to be considered, by the Navy, as inferior to their sail predecessors. And when the transistor was released, many said they were no substitute for vacuum tubes. 

In the case of discernment, coming up with something new doesn’t automatically mean that it is better. There must be an accompanying, hard to vary, explanation for why it is better.

Back to Sarl’s story, he joined the school’s astronomy club and one night they gathered to watch the sky. When it was his turn at the telescope, he was lucky to find and follow a small meteor until it hit the ground. Sarl saw everything happening, the crater was formed after the impact, not before. Right there, he had to come to the realization that the theory he had believed for most of his life was incorrect. Every fiber of his being wanted to fight against this new knowledge. It was against his identity; it was against his reason. How is it possible that he was wrong this whole time? Could there be another explanation?

Will Sarl change his mind in light of new information and better explanation? Would you?

Have you lived through, seen, or heard of other examples where cause and effect are misunderstood, or discernment is compromised? (Especially in business.)