Occam's razor (or Ockham's razor) is a principle from philosophy. Suppose there are two explanations for an occurrence or event. According to Occam’s razor, the simpler explanation is usually better. Another way of saying it is that the more assumptions you have to make, the more unlikely an explanation.
This principle is one that many of us overlook in our lives. Once you see the answer though, it’s as if you should have known it was there all the time. In the world of insurance and high-priced actuarial consulting firms, shouldn’t this principle always be the first one we gravitate toward? Do our clients need to be paying for a complicated analysis? Would the answer you get change with more review? As actuaries, we have a tendency to obsess with detail, which can overcomplicate business scenarios.
Case in point: we worked with a company where the business value was being calculated by multiple parties. One of the consulting companies was charging 10 times what we would have quoted on a job. Unfortunately, due to conflicts, we couldn't take the work. It was a wakeup call that couldn't be answered.
We struggle with this balance internally in our firm all the time. The most common mistake that a new consultant can make is to miss the scope of work. I've had a new consultant spend an entire week on something that was thrown away entirely because a different path could have produced a similarly useful result. It's a hard lesson to learn.
The real lesson for a firm might be related to communication. The better approach would have been to communicate more clearly in the initial planning phase of the project. This not only applies to internal staff, but also to your customers. The other key element is making sure project leaders or managers encourage an environment of strong communication. Without exception, the people who communicate clearly and regularly will ultimately increase their chances of success for themselves and their clients.