Survivorship Bias

by Krishna on January 4, 2009

I recently read “Outliers”, the new book by Malcolm Gladwell. Gladwell is always a fascinating writer and in the book, he illustrates how luck and circumstances have much to do with one’s fortunes than we generally give credit for. One of his most striking examples is how Canadian ice hockey players born in the first few months of the year are more likely to be selected into teams, even though the selection system prides itself on being merit-oriented and without bias.

The role of chance in affecting the outcome of human lives is a concept that we accept, but don’t really assimilate properly in our thinking. Most of us are perfectly willing to treat other people’s successes as the cause of fortunate circumstances or lucky breaks. But when it comes to our own accomplishments, it is always about us – how hard we work or how clever we are. Human beings generally have a lot of self-esteem which are bolstered even further upon success.

So, in any analysis of success or failure, we are faced with an asymmetrical puzzle: The winners always think they (and their actions) are the reason for their success and the losers blame other people or things. Of course, we don’t actually hear from the losers that much unless they have a good scapegoat. For example, many investors swindled by Bernard Madoff have come forward, but you don’t hear much from other investors (and financial “experts”) who lost huge packets on their own in the recent stock market downturn. As they say, “Success has many fathers, but failure is an orphan.

Most of the noise in the news and blogosphere is created by the successful. This is correct in one way: you obviously don’t want to hear lessons for success from those who failed. But in another way, it can also be completely misleading: Those who are successful may be imparting the wrong lessons simply because their success owes less to what they did than external circumstances.

The problem with the advice of every expert is that their viewpoint is restricted. They look at what they did and what happened to them. They don’t know what didn’t happen to them (for example, an economic downturn or sudden accident). They don’t know what others in their field did similar to them, but didn’t succeed. They under-estimate many important aspects of circumstances such as the time (year) they did the work, or what people they knew, or what competition they didn’t have to encounter.

For example, take tennis. How many of the top tennis players from 2004 onwards could have achieved Grand Slam trophies if there was no such person as Roger Federer? How about if you were born with a great aptitude for mathematics, but were born in poverty-stricken Somalia? Or, you were an unlucky Jew in Hitler’s Germany or an educated person in Pol Pot’s Cambodia?

Now, don’t get me wrong. What you do is as significant as the circumstances that surround you. Working hard, constantly learning and improving oneself can pay dividends. But that is not the rhetoric that you hear from experts. Their message is, “Do what I did, and you can succeed like me.” This is false on so many levels, but let us take the simplest: If everyone followed the expert’s advice, there would be so much competition that you need to do something different to stick out from the crowd.

So, what can you do? I think one way is to change our outlook towards experts. Instead of assuming that they know all because of their past success, we should consider their advice along with each of our unique circumstances. Sometimes the advice may be useful, sometimes it may not. Always be a skeptic.

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