How can economists add significant value to a company? originally appeared on Quora - the knowledge sharing network where compelling questions are answered by people with unique insights.
Rule # 1: Think with your own head, independently. There is too much group-think out there. You add value by thinking independently, coming up with original ideas, so that sometimes you will be right when everyone else is wrong. But if after coming up with your original idea you find everyone else thinks the same, just go with the flow...
Rule # 2: Take a stance--be the one-handed economist. Look here if the one-handed reference puzzles you. On many of the issues we deal with, there is a lot of uncertainty. But someone has to make the call. Are we going into a recession or not? You are the economist, you have the expertise--you make that call. Your colleagues running the business have a lot of other uncertainties to deal with, they don't need yours.
Rule # 3: Be open and honest on the probabilities. You make the call, but you should also give your colleagues a sense of your confidence interval. Are you 90% sure or is it closer to 60%? That is important information as well, so assess those probabilities honestly--picture yourself betting money.
Rule # 4: Admit it, it's not rocket science--explain your thought process. Be clear on why you think something will happen. Explain the dynamics. Economics is not rocket science, it's mostly common sense. If you have not explained it clearly, you have not done your job. And when you walk your colleagues through your logic, you are helping them more than you think. Because from their perspective they will pick up something you missed, and that might be very important for their decisions.
Rule # 5: Be a filter. Filter out the nonsense. We are bombarded with news and opinions. And when it comes to economics, it's a disaster. First because economics is a bit like football/soccer/pick your sport: everyone is an expert. Second because even the certified experts sometime lose all dignity and make nonsensical arguments just to push an agenda. Your business leaders don't have time for this nonsense. You have to protect them. Tell them what matters and what doesn't, what they should ignore and what they need to focus on. You'll be surprised how much that can help them.
With these five rules you will be in good shape. Ah, yes...and try to be right as often as possible.