Strategy. Innovation. Brand.

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Surviving The Survivorship Bias

You too can be popular.

You too can be popular.

Here are three articles from respected sources that describe the common traits of innovative companies:

The 10 Things Innovative Companies Do To Stay On Top (Business Insider)

The World’s 10 Most Innovative Companies And How They Do It (Forbes)

Five Ways To Make Your Company More Innovative (Harvard Business School)

The purpose of these articles – as Forbes puts it – is to answer a simple question: “…what makes the difference for successful innovators?” It’s an interesting question and one that I would dearly love to answer clearly.

The implication is that, if your company studies these innovative companies and implements similar practices, well, then … your company will be innovative, too. It’s a nice idea. It’s also completely erroneous.

How do we know the reasoning is erroneous? Because it suffers from the survivorship fallacy. (For a primer on survivorship, click here and here). The companies in these articles are picked because they are viewed as the most innovative or most successful or most progressive or most something. They “survive” the selection process. We study them and abstract out their common practices. We assume that these common practices cause them to be more innovative or successful or whatever.

The fallacy comes from an unbalanced sample. We only study the companies that survive the selection process. There may well be dozens of other companies that use similar practices but don’t get similar results. They do the same things as the innovative companies but they don’t become innovators. Since we only study survivors, we have no basis for comparison. We can’t demonstrate cause and effect. We can’t say how much the common practices actually contribute to innovation. It may be nothing. We just don’t know.

Some years ago, I found a book called How To Be Popular at a used-book store. Written for teenagers, it tells you what the popular kids do. If you do the same things, you too can be popular. It’s cute and fluffy and meaningless. In fact, to someone beyond adolescence, it’s obvious that it’s meaningless. Doing what the popular kids do doesn’t necessarily make your popular. We all know that.

I bought the book as a keepsake and a reminder that the survivorship fallacy can pop up at any moment. It’s obvious when it appears in a fluffy book written for teens. It’s less obvious when it appears in a prestigious business journal. But it’s still a fallacy.

 

Seldom Right. Never In Doubt.

I'm never wrong. About anything.

I’m never wrong. About anything.

Since I began teaching critical thinking four years ago, I’ve bought a lot of books on the subject. The other day, I wondered how many of those books I’ve actually read.

So, I made two piles on the floor. In one pile, I stacked all the books that I have read (some more than once). In the other pile, I stacked the books that I haven’t read.

Guess what? The unread stack is about twice as high as the other stack. In other words, I’ve read about a third of the books I’ve acquired on critical thinking and have yet to read about two-thirds.

What can I conclude from this? My first thought: I need to take a vacation and do a lot of reading. My second thought: Maybe I shouldn’t mention this to the Dean.

I also wondered, how much do I not know? Do I really know only a third of what there is to know about the topic? Maybe I know more since there’s bound to be some repetition in the books. Or maybe I know less since my modest collection may not cover the entire topic. Hmmm…

The point is that I’m thinking about what I don’t know rather than what I do know. That instills in me a certain amount of doubt. When I make assertions about critical thinking, I add cautionary words like perhaps or maybe or the evidence suggests. I leave myself room to change my position as new knowledge emerges (or as I acquire knowledge that’s new to me).

I suspect that the world might be better off if we all spent more time thinking about what we don’t know. And it’s not just me. The Dunning-Kruger effect states essentially the same thing.

David Dunning and Justin Kruger, both at Cornell, study cognitive biases. In their studies, they documented a bias that we now call illusory superiority. Simply put, we overestimate our own abilities and skills compared to others. More specifically, the less we know about a given topic, the more likely we are to overestimate our abilities. In other words, the less we know, the more confident we are in our opinions. As David Dunning succinctly puts it, “…incompetent people do not recognize—scratch that, cannot recognize—just how incompetent they are.”

The opposite seems to be true as well. Highly competent people tend to underestimate their competence relative to others. The thinking goes like this: If it’s easy for me, it must be easy for others as well. I’m not so special.

I’ve found that I can use the Dunning-Kruger effect as a rough-and-ready test of credibility. If a source provides a small amount of information with a high degree of confidence, then their credibility declines in my estimation. On the other hand, if the source provides a lot of information with some degree of doubt, then their credibility rises. It’s the difference between recognizing a wise person and a fool.

Perhaps we can use the same concept to greater effect in our teaching. When we learn about a topic, we implicitly learn about what we don’t know. Maybe we should make it more explicit. Maybe we should count the books we’ve read and the books we haven’t read to make it very clear just how much we don’t know. If we were less certain of our opinions, we would be more open to other people and intriguing new ideas. That can’t be a bad thing.

The Doctor Won’t See You Now

Shouldn't you be at a meeting?

Shouldn’t you be at a meeting?

If you were to have major heart problem – acute myocardial infarction, heart failure, or cardiac arrest — which of the following conditions would you prefer?

Scenario A — the failure occurs during the heavily attended annual meeting of the American Heart Association when thousands of cardiologists are away from their offices or;

Scenario B — the failure occurs during a time when there are no national cardiology meetings and fewer cardiologists are away from their offices.

If you’re like me, you’ll probably pick Scenario B. If I go into cardiac arrest, I’d like to know that the best cardiologists are available nearby. If they’re off gallivanting at some meeting, they’re useless to me.

But we might be wrong. According to a study published in JAMA Internal Medicine (December 22, 2014), outcomes are generally better under Scenario A.

The study, led by Anupam B. Jena, looked at some 208,000 heart incidents that required hospitalization from 2002 to 2011. Of these, slightly more than 29,000 patients were hospitalized during national meetings. Almost 179,000 patients were hospitalized during times when no national meetings were in session.

And how did they fare? The study asked two key questions: 1) how many of these patients died within 30 days of the incident? and; 2) were there differences between the two groups? Here are the results:

  • Heart failure – statistically significant differences – 17.5% of heart failure patients in Scenario A died within 30 days versus 24.8% in Scenario B. The probability of this happening by chance is less than 0.1%.
  • Cardiac arrest — statistically significant differences – 59.1% of cardiac arrest patients in Scenario A died within 30 days versus 69.4% in Scenario B. The probability of this happening by chance is less than 1.0%.
  • Acute myocardial infarction – no statistically significant differences between the two groups. (There were differences but they may have been caused by chance).

The general conclusion: “High-risk patients with heart failure and cardiac arrest hospitalized in teaching hospitals had lower 30-day mortality when admitted during dates of national cardiology meetings.”

It’s an interesting study but how do we interpret it? Here are a few observations:

  • It’s not an experiment – we can only demonstrate cause-and-effect using an experimental method with random assignment. But that’s impossible in this case. The study certainly demonstrates a correlation but doesn’t tell us what caused what. We can make educated guesses, of course, but we have to remember that we’re guessing.
  • The differences are fairly small – we often misinterpret the meaning of “statistically significant”. It sounds like we found big differences between A and B; the differences, after all, are “significant”. But the term refers to probability not the degree of difference. In this case, we’re 99.9% sure that the differences in the heart failure groups were not caused by chance. Similarly, we’re 99% sure that the differences in the cardiac arrest groups were not caused by chance. But the differences themselves were fairly small.
  • The best guess is overtreatment – what causes these differences? The best guess seems to be that cardiologists – when they’re not off at some meeting – are “overly aggressive” in their treatments. The New York Times quotes Anupam Jena: “…we should not assume … that more is better. That may not be the case.” Remember, however, that this is just a guess. We haven’t proven that overtreatment is the culprit.

It’s a good study with interesting findings. But what should we do about them? Should cardiologists change their behavior based on this study? Translating a study’s findings into policies and protocols is a big jump. We’re moving from the scientific to the political. We need a heavy dose of critical thinking. What would you do?

Personal Branding In The Social Media Age

Rock climbing, biking, or violent crime?

How’s my brand?

When I was a teenager, my mother urged me to dress nicely because, “you do want to make a good impression, don’t you?” She even taught me how to iron my clothes so I could make a neatly pressed impression. (In fact, “pressing” clothes and making an “impression” derive from the same root). I remember asking her, “If it’s so important to make a good impression, why don’t you iron my clothes?” She answered with a smile: “It’s not that important”.

Mom also told me (repeatedly) that “you have only one chance to make a first impression.” She didn’t know it but she was speaking the language of personal branding. I’m often asked what personal branding means and I simply shrug and say, “it’s the impression you make”. We all make an impression on others, whether we intend to or not, and that impression is essentially our brand.

Another popular definition is that your personal brand is what other people say about you when you’re not around. Actually, I would distinguish between two different commentaries. When you’re not around, people can talk about what you do or who you are. The what-you-do stories are often interesting (“Did you hear what Travis did?”) but they’re not really your brand. Your brand consists of the who-you-are comments.

While the what-you-do stories can be lengthy, the who-you-are commentaries are usually quite brief – typically, 25 words or less. So your brand consists of the roughly 25 words that people speak about you when you’re not around. (This is a pretty good definition of a corporate brand as well).

If you care about your brand (some people don’t), you need to think about how to get the right words in place. My mother called it making an impression; today we call it managing your brand. But, really it’s the same thing. How do you get people to think of you in the way you want to be thought of?

One big difference between my mom’s era and today is the arrival of social media. In my mom’s day, making an impression typically meant meeting somebody face-to-face. Or it might have meant a good cover letter and resumé. (Mom was a great copy editor). Either way, it was personal.

Today, it’s not so personal. I can make a first impression on someone I’ve never met and never even heard of. Recruiters might look me up on LinkedIn. Friends of friends might see my Facebook page. Indeed, I hope that lots of people I don’t know will come to my website.

The other big difference from my mom’s era is the economy. My mother grew up in a manufacturing economy, where your skills were important. We’re now in a service economy, where your personality is important. As Tony Tulathimutte points out in The New Yorker, “Success in a service job … often involves getting people to see you as competent and likeable. … Now that what we have to offer in the service economy is ourselves, the rules of branding apply to us.”

So how do you make a good first impression these days? Think about the 25 words you want people to say about you and then work backwards. If you want people to say you’re intelligent, you better learn to write (and spell) well. If you want people to say you’re a good manager, then highlight your management expertise. As my mother used to say, “just remember to put your best foot forward”. Oh, and learn how to iron

Are You Happy? Hedonic or Eudaemonic?

I'm just peaking.

Eudaemonia!

Research on happiness often distinguishes between two types: affective happiness and evaluative happiness. Affective happiness is how you’re feeling now and in the recent past. It’s fairly volatile and can rise or fall quickly. Evaluative happiness measures how happy you are with your life. It tends to be more stable.

Both types of happiness fit into a broader category generally known as the hedonic theory of happiness. This is essentially the pleasure principle – we seek pleasure and avoid pain. It’s fairly straightforward and is often considered the ultimate goal in theories of positive thinking.

But let’s think critically about this. Is pleasure really all there is to happiness? When you overcome obstacles in life, doesn’t that make you happy, even if the process is painful? Can you be happy simply by thinking positively and banishing negative thoughts? Indeed, can you truly banish negative thoughts and emotions?

These questions lead to a different theory of happiness that’s often known as the eudaemonic perspective. In Western thought, the concept originated with Aristotle. The basic idea is that we should lead an actively engaged life, colored by virtue and excellent character. It’s often compared to what Mihaly Csikszentmihalyi calls flow – when you’re completely immersed in what you’re doing. You harness your emotions toward a task and become completely absorbed by it.

When you’re fully engaged, negative thoughts may arise just as easily as positive thoughts. Rather than trying to suppress negative thoughts, you simply let them flow by. They’re part of who we are. In fact, they probably have some survival value. They can spur you to take action against an obstacle, do something unpleasant but necessary, or even just take your medicine.

Indeed, it may well be the case that trying to suppress negative thoughts causes us to have more of them rather than fewer. As Tori Rodriguez reports, a phenomenon called dream rebound may come into play. Researchers at the University of New South Wales divided participants into two groups. One group was asked to suppress a negative thought just before falling asleep. The other group did not try to suppress their thoughts. Those who tried to suppress their negative thoughts reported dreaming about it more frequently than those who didn’t. (Though it’s a different realm, this is similar to Jevon’s paradox).

In my experience, negative thinking produces a second-order effect. First, we have a negative thought. Second, we get wound up about having negative thoughts. OMG, am I a negative person? Why do I have such negativity?

In my opinion, the second-order effect is more damaging than the first. Of course we’re going to have negative thoughts. We can’t avoid them. In fact, they probably help us survive. The trick is to let them pass. As the Tibetans say, thinking is like writing on water. It goes away. Allowing negative thoughts to flow may not lead us to hedonic happiness but may very well stimulate eudaemonic happiness.

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