survivor bias

Lucky people generate their own good fortune via four basic principles.

  • They are skilled at creating and noticing chance opportunities,
  • make lucky decisions by listening to their intuition,
  • create self-fulfilling prohesies via positive expectations, and
  • adopt a resilient attitude that transforms bad luck into good.

PSYCHOLOGY OF LUCK

This project scientifically explores why some people live such charmed lives, and develops techniques that enable others to enhance their own good fortune. The research has involved working with hundreds of exceptionally lucky and unlucky people, and the findings have been published in The Luck Factor. For an overview of this work, download this articlefrom Skeptical Inquirer magazine.
The Four Principles

Prof Wiseman has identified the four basic principles that lucky people use to create good fortune in their lives.

Principle One: Maximise Chance Opportunities
Lucky people are skilled at creating, noticing and acting upon chance opportunities. They do this in various ways, including networking, adopting a relaxed attitude to life and by being open to new experiences.

Principle Two: Listening to Lucky Hunches
Lucky people make effective decisions by listening to their intuition and gut feelings. In addition, they take steps to actively boost their intuitive abilities by, for example, meditating and clearing their mind of other thoughts.

Principle Three: Expect Good Fortune
Lucky people are certain that the future is going to be full of good fortune. These expectations become self-fulfilling prophecies by helping lucky people persist in the face of failure, and shape their interactions with others in a positive way.

Principle Four: Turn Bad Luck to Good
Lucky people employ various psychological techniques to cope with, and often even thrive upon, the ill fortune that comes their way. For example, they spontaneously imagine how things could have been worse, do not dwell on ill fortune, and take control of the situation.

Luck School

Prof Wiseman’s work also involves developing techniques that help people think and behave like a lucky person. The efficacy of these techniques has been scientifically tested in a series of experiments referred to as ‘luck school’. The project has proved highly successful, with almost all participants reporting significant life changes, including increased levels of luck, self-esteem, confidence and success.

Links

BBC Online article on Prof Wiseman’s luck research

Forbes.com carries Prof. Wiseman’s article on the psychology of opportunity.

Fast Company article on The Luck Factor in business.

The Times reports Prof Wiseman’s work on creating opportunities and his book, Did You Spot the Gorilla?

The Daily Telegraph reports on an experiment on connectivity and luck.

Report on Prof Wiseman’s work exploring luck and superstition.


How the Survivor Bias Distorts Reality


learning only from success is a deeper problem than you imagine

Survivorship bias, or survival bias, is the logical error of concentrating on the people or things that “survived” some process and inadvertently overlooking those that did not because of their lack of visibility. This can lead to false conclusions in several different ways. The survivors may be actual people, as in a medical study, or could be companies or research subjects or applicants for a job, or anything that must make it past some selection process to be considered further.

Survivorship bias can lead to overly optimistic beliefs because failures are ignored, such as when companies that no longer exist are excluded from analyses of financial performance. It can also lead to the false belief that the successes in a group have some special property, rather than just coincidence. For example, if three of the five students with the best college grades went to the same high school, that can lead one to believe that the high school must offer an excellent education. This could be true, but the question cannot be answered without looking at the grades of all the other students from that high school, not just the ones who “survived” the top-five selection process.

Survivorship bias is a type of selection bias.

In Search of Excellence is an international bestselling book written by Tom Peters and Robert H. Waterman, Jr..

First published in 1982, it is one of the biggest selling business books ever, selling 3 million copies in its first four years, and being the most widely held monograph in the United States from 1989 to 2006 (WorldCat data).

The book purports to explore the art and science of management used by several 1980s companies.

As early as 1984 it was apparent, to certain analysts, that the book’s choice of companies was poor to indifferent. NCR, Wang Labs, Xerox and others did not produce excellent results in their balance sheets in the 1980s.

Rick Chapman titled his book on high-tech marketing fiascoes, In Search of Stupidity, as a nod to Peters’s book and the disasters that befell many of the companies it profiled. He notes that “with only a few exceptions… [the excellent companies were] large firms with dominant positions in markets that were senescent or static.”

In an article in Fast Company, cited below, Peters remarked that the criticism that “If these companies are so excellent, Peters, then why are they doing so badly now,” in his opinion “pretty much misses the point.”[6]

The research methodology employed by the authors of this book is also severely criticized by Phil Rosenzweigh in his book “The Halo Effect” [7] as the “Delusion of Connecting the Winning Dots”. Rosenzweigh opines that it was not possible to identify the traits that make a company perform simply by studying already-performing companies which Peters and Waterman did.

Peters’ “confession” of “faked data”

In December, 2001, Fast Company printed an article, crediting Tom Peters as author, entitled “Tom Peters’s True Confessions”. Most of the “confessions” were humorously self-deprecating remarks (In Search of Excellence had been “an afterthought… a hip-pocket project that was never supposed to amount to much”). One of them, however, used the term “faked data:”

This is pretty small beer, but for what it’s worth, okay, I confess: We faked the data. A lot of people suggested it at the time. The big question was, How did you end up viewing these companies as “excellent” companies? A little while later, when a bunch of the “excellent” companies started to have some down years, that also became a huge accusation: If these companies are so excellent, Peters, then why are they doing so badly now? Which I’d say pretty much misses the point.
[In] Search [of Excellence] started out as a study of 62 companies. How did we come up with them? We went around to McKinsey’s partners and to a bunch of other smart people who were deeply involved and seriously engaged in the world of business and asked, Who’s cool? Who’s doing cool work? Where is there great stuff going on? And which companies genuinely get it? That very direct approach generated a list of 62 companies, which led to interviews with the people at those companies. Then, because McKinsey is McKinsey, we felt that we had to come up with some quantitative measures of performance. Those measures dropped the list from 62 to 43 companies. General Electric, for example, was on the list of 62 companies but didn’t make the cut to 43 — which shows you how “stupid” raw insight is and how “smart” tough-minded metrics can be.
Were there companies that, in retrospect, didn’t belong on the list of 43? I only have one word to say: Atari.
Was our process fundamentally sound? Absolutely! If you want to go find smart people who are doing cool stuff from which you can learn the most useful, cutting-edge principles, then do what we did with Search: Start by using common sense, by trusting your instincts, and by soliciting the views of “strange” (that is, nonconventional) people. You can always worry about proving the facts later.[6]

BusinessWeek ran an article about Fast Company’s article. As related by BusinessWeek, the article was actually written by Fast Company founding editor Alan M. Webber, based on a six-hour interview with Peters. Peters reviewed and approved the article prior to publication, but the actual phrase “we faked the data” was Webber’s, and Peters had not actually used these words during the interview. BusinessWeek quoted Peters as saying “Get off my case. We didn’t fake the data.” According to BusinessWeek, Peters says he was “pissed” when he first saw the cover. “It was his [Webber’s] damn word,” he says. “I’m not going to take the heat for it.”[8]

The definition of luck (or chance) varies by the philosophical, religious, mystical, and emotional context of the one interpreting it; according to the classic Noah Webster‘s dictionary, luck is “a purposeless, unpredictable and uncontrollable force that shapes events favourably or unfavourably for an individual, group or cause”.[1] Yet the author Max Gunther defines it as “events that influence one’s life and are seeminglybeyond one’s control”.[2]

When thought of as a factor beyond one’s control, without regard to one’s will, intention, or desired result, there are at least two senses that people usually mean when they use the term, the prescriptive sense and the descriptive sense. In the prescriptive sense, luck is asupernatural and deterministic concept that there are forces (e.g. gods or spirits) that prescribe that certain events occur very much the way laws of physics will prescribe that certain events occur. It is the prescriptive sense that people mean when they say they “do not believe in luck“. In the descriptive sense, people speak of luck after events that they find to be fortunate or unfortunate, and maybe improbable.

Therefore, cultural views of luck vary from perceiving luck as a matter of random chance to attributing to such explanations of faith orsuperstition. For example, the Romans believed in the embodiment of luck as the goddess Fortuna,[3] whereas the philosopher Daniel Dennett believes that “luck is mere luck” rather than a property of a person or thing.[4] Carl Jung viewed luck as synchronicity, which he described as “a meaningful coincidence”.

Lucky symbols are popular worldwide and take many forms.

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