When it comes to legal advice, I often find myself giving a “practical common sense” answer to a client rather than the usual technical legal approach. This usually results in a more expedient and cost-effective outcome for the client.
Daniels points out that common-sense knowledge is individual and unreflective; scientific knowledge is based on analysis. This distinction should be taken into account when developing management strategies.
Legal Issues
In the business of law, common sense is a heuristic that draws upon intuition to decide what is appropriate in particular circumstances. It is an essential tool in judging a case or advising a client, but it is difficult to define and to replicate on computers.
For example, it isn’t easy to create software that embodies common sense because of the wide variation in situations and decisions that can be encountered. As a result, legal rules often contain many exceptions that are not readily apparent to those who apply the rule.
An important application of common sense is in interpreting contracts. It has long been recognised that contractual interpretation is not a strictly literalist exercise focused solely on parsing the words of the contract. It requires consideration of the context of the contract, the facts of the matter, and commercial common sense.
The latest edition of the LVMH Corporate Governance Principles has adopted a common-sense approach to shareholder engagement. It recommends that institutional asset owners (e.g., pension funds and endowments) use their position to advocate for long-term oriented corporate governance.
Another example of a common-sense approach is the prevailing approach to disclosure in litigation finance matters. This approach recognises that litigation finance providers do not need to be disclosed in every case. It also avoids the need for additional rules and regulations, which would be an unnecessarily costly and time-consuming endeavour.
Business Issues
Many business issues can be solved with common sense. Whether it’s promoting ethical business practices, creating a culture of innovation, or ensuring your company has the right legal framework in place, common sense is a critical component of successful businesses.
It’s also a key element of leadership. But the truth is, “common sense” leadership isn’t a passive trait; it’s a disciplined process of learning and adapting that requires an ongoing commitment to deep learning and human-centric values. The impact of common sense leadership is directly linked to the willingness of leaders to embody and hone this approach in a rapidly changing world.
This is why it’s so important to identify and correct the misconceptions and stereotypes that create artificial barriers to success in your business. Historically, for example, the belief that women can’t be leaders or won’t make good business decisions has been justified with the assertion that it’s “common sense.”
In the same way, arguments over how contracts should be interpreted often come down to a battle of literalists versus contextualists. Thankfully, recent cases such as BMA v African Minerals have demonstrated that commercial common sense can play an important role in contractual interpretation. This means that judges should be allowed to consider a range of factors in addition to parsing the literal words of a particular clause.
Personal Issues
A lot of people want simple, “common sense” solutions to highly complex issues, particularly in politics. The problem is that these “common sense” solutions often fail or have serious unintended consequences. The reason is that they’re based on heuristic methods that are inherently simplifications of our real-world experiences. They may be more familiar to us, but that doesn’t make them any less flawed or dangerous.
One example of common sense is etiquette, which is a kind of practical intelligence that guides harmonious human interaction. This includes learning from experience, respecting others’ dignity, and being aware of the context of your actions. Common sense etiquette also emphasizes avoiding harm and deception.
Another aspect of common sense is intuition, which is a basic ability to perceive and understand the subtleties of life’s situations. The ability to read other people’s body language, for instance, is a kind of common sense that allows you to anticipate what others will think or feel about what you say or do. In a business setting, this kind of common sense is important for avoiding misunderstandings and conflicts. It can also help you avoid making assumptions based on superficial clues. Whenever you hear someone use the phrase, “Well, everybody knows that…” put on your Doubt Hat and look for more evidence. This is a sign that they’re using a shortcut to judgment rather than carefully considering the issue at hand.
Decision-Making
Common sense, when applied with the right context and depth, can help to guide strategic decision-making and promote positive business outcomes. However, the simplicity of this advice can also make it easily dismissed as “obvious” and lead to superficial engagement that prevents true behavioral or organizational change.
Incorporating Common Sense into Strategic Discussions
Incorporate the insights of team members with a wealth of practical experience to balance data-heavy analyses with intuition-driven understanding. In doing so, teams can identify opportunities that a purely data-driven approach might overlook.
For example, a team member may notice that customers prefer to communicate via email rather than over the phone because of the more efficient and less expensive nature of this communication mode. Using common sense, this team member might then suggest an update to the company’s customer support processes.
This type of common-sense solution is one that benefits everyone by reducing the amount of time spent in meetings, eliminating the need to spend energy and resources arguing over a specific method, and allowing teams to focus their efforts on finding solutions that work. Leaders who prioritize the application of common sense principles tend to have more success building and maintaining strong relationships with their teams, as well as being able to navigate complexity with ease. In turn, this helps to create a stronger, more resilient business environment that thrives in today’s ever-changing marketplace.