Language Matters

07.24.2014 By

From our latest Discussion Paper…

“Here,” I said, pointing to nowhere in particular. “Eleven o’clock.” I looked into the big, brown eyes of my driver and searched for some sign he understood my request. Nothing. He stared back blankly and then… smiled? This completely confused me. Had he understood my request? Or did he simply have empathy for my obvious frustration, which was manifesting in abnormally large hand gestures and an obsessive compulsion to check my phone? I had no clue, but it seemed my driver was perfectly satisfied with this exchange—he turned around, a smile still on his face.

My driver and I had spent the last two days navigating the streets of Bangkok in a sedan. He was driving me to my business meetings and I was attempting to get to them on time, which was no small feat given the chaotic traffic in Bangkok. Our efforts were rendered vastly more difficult by a severe language gap: he spoke no more than five words of English; my Thai was worse. It was a painful reminder of the value of sharing a common language.

When we reflect on the challenges of language, scenarios like my Thai business trip often come to mind. We think of the barriers of communication that exist between languages; less attention is paid to the choices made within a language, such as the use of certain words or frameworks. Yet these choices can greatly impact a team’s overall effectiveness.

Just how important is a common language to investing? While some investors view it as the sort of soft, fluffy stuff best left to liberal arts majors, empirically—and in our experience— it is an essential feature of high performing investment teams. A team’s use of language can have a significant impact on cognitive bias, team candour, quality of debate, speed of information processing and overall decision-making. This matters because the chief challenge of any investor is to get as close as possible to the truth, and ignorance of language and its influence increases the likelihood of bias and delusion. When we improve our language skills, we improve the quality of our decision-making.

Read the full article here.

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