The role of chance

A game of chance

A recipe for success

Several years ago my manager walked in with a pile of books titled, ‘what would google do.’ We should all read it to find the recipe of succes for our company.
In my pile of books, this one landed at the bottom, reflecting my reluctance to take it at hand. I have always been sceptical about glorifying the magic touch of leaders, and adhere to the saying, ‘if something seems to good to be true, it usually is.’
There were more management bestsellers like, ‘built to last’ and ‘in search of excellence,’ that investigated the differences between succesful and unsuccesful companies.

In control

I knew better than to challenge their vibes of success as it would have put me aside as someone who wasn’t striving for the best – a suicidal move in a company that wants to feel in control.

The role of chance

My gut feeling was confirmed years later, when follow up studies found sharp drops in profitability of the ‘excellent’ firms, and increasing returns of the unsuccesful ones.
The explanation of this phenomenon is offered by Daniel Kahneman* in his book ‘Thinking fast and slow.’
It is an established statistic fact called regression to the mean: The more luck is involved to create outcomes, the more these outcomes will regress back to the mean – exactly like they did in the follow up of excellent and lousy performing companies. The excellent ones were not driven by superior insights, but instead just surfing on a wave of good fortune.

Why we fool ourselves

Knowing this, then why do people still cling to fluffy success stories? Well, simply because they bring us a comfortable illuson of understanding. Our mind wants to construct coherent narratives about the past, that foster a sense of inevitability. We simplify reality to match a pattern we have seen before. This way we reassure ourselves that the world makes sense.
People are craving for stories that are concrete, assign a larger role to talent and intentions than to luck, and focus on striking events rather than the countless ones that failed to happen. We glorify Google, and forget about the flood of competitors that failed.

Learnings

Business books reduce anxiety by showing that succes rewards wisdom and courage; ‘Yes, yes, my daily activities are meaningful’.
In reality, as there is so much luck involved, there is little to be learned. You cannot use these ‘business romances’ to predict the future.
Surely, motivational stories can inspire us, but they are no cookbook. Not forgetting the role of chance prevents us from finding ourselves all too important.

*For those who have read my previous blog about intuition, sorry, I just can’t get enough of the academic insights ‘thinking fast and slow’ offers and this blog owes a lot to it.

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