Thinking biases are a common way to make a lot of judgment mistakes. We need to pay attention to them in order to avoid them. I recently read a book about thinking called The Art of Thinking Clearly written by Rolf Dobelli . Although the writing is a little bit ambiguous, the book is filled with great and amazing knowledge. The author summarized the human miscalculations of life experiences in a very attractive way. The author went through 99 thinking errors the human brain can commit. We all make these errors, but in order to avoid them as much as possible we need to post these errors around our study place or office and review them regularly — at least this is what I did. I will not go through the 99 thinking errors in the book, but I will select some of these errors I have made as well as adding others from my own experiences.
Why you should visit failed companies : Survivorship Bias
The number of people failing in business, writing books, and athletes outnumber the successful people. In a way, we benefit more from studying failure than studying success. At least when you study failure, finding patterns is much easier. Specifically, people misjudge the possibility of succeeding and they should visit the “graves” of failed projects, investments, and careers to learn more.
As a researcher, the amount of time spent conducting failed experiments compared to successful experiments (publishable data) is around 80%. This begs the question: wouldn’t it be easier to publish negative data compared to positive ones? I found this idea to be true when I started counting the number of failed experiments in my lab. Ask any scientist about the number of failed experiments compared with successful publishable experiments. I am sure the best scientists will tell you that failed experiments outnumber successful ones.
From my experiences in graduate school, I know that graduate students close to their advisors usually get more results and publish more manuscripts. Scientific advisors steer their students away from failed experiments. Publishing negative results will allow us to avoid the beaten path of more mistakes and failed experiments. The negative experiences will help us to modify our experiments to produce successful experiments.
Ben Goldacre, a physician and science writer who finished his MD from Oxford University and did his internship in epidemiology at the London School of Hygiene and Tropical Medicine, argues that when a new drug is tested, the results of the trials, whether positive or negative, should be published so everyone in the medical world can read them. Goldacre has a fascinating Ted talk with 1.6 million viewers. Not being able to see the results of failed drug trials leaves doctors and researchers in the dark and has harmful consequences. Reading the data of unsuccessful drug trials would allow doctors to seek the best treatment for their patients.
Barry Schwartz in his Paradox of Choice said “Most of us seem to share the intuition that we regret actions that don’t turn out well more than we regret failures to take actions that would have turned out well. This is sometimes referred to as an omission bias, a bias to downplay omissions (failure to act) when we evaluate the consequences of our decisions.”
The extrapolation bias
Why do attractive people climb the career ladder more quickly? There is no relationship between competence and attractiveness in conducting a job. But again, many studies and TV shows, including 60 Minutes, showed attractive appearance is an advantage when you apply for a job. You can see this extrapolation bias even when you browse a book. An eye-catching title attracts more people to look at the book compared to less attractive title. Having the same book published with two different titles proved again and again that one title encourages extrapolation bias more than the other titles. We can even see this in watching movies; the movie, which has your favorite actor or actress regardless of the movie plot, encourages you to extrapolate your bias to watch the movie. Perhaps the advertising industry is the biggest exploiter of this bias. Having a celebrity use a product encourages many people to use the product regardless of the quality of the product.
Buying certain brands is an extrapolation bias. We are encouraged to buy a coffee machine made by a company that is known to manufacture food processing blenders — simply it has a more well-known brand name. Costco brochures and its website advertise the store by saying “Think Costco First!” Costco is capitalizing on their reputation (extrapolation bias) to buy and sell quality products. Dr. Oz’s endorsement to buy over-the-counter vitamins and herbal supplements also feeds on our extrapolation bias. I even got into that trap myself when my cardiac stress test technician asked me about the vitamins I am taking. When I told him a certain vitamin, he asked me what it does. I thought for a minute and then said that I didn’t remember, but I know that Dr. Oz or Dr. Andrew Weil recommended it! I was embarrassed by this, and so I decided to study the scientific evidence of that vitamin again. I was glad to discover that the evidence was strong to continue taking it.
The extrapolation bias can be seen when a company CEO is hired to run another company. Although the newly hired CEO has no experience and record of managing such a company, the extrapolation bias convinced the board members to hire the CEO. Steve Jobs fell into the extrapolation bias when he hired John Sculley (president and CEO of PepsiCo) to lead Apple. Jobs believed strongly that John Sculley would be the superman who would move Apple sales to the roof. The famous phrase used by Steve Jobs to convince John Sculley to accept the offer , “Do you want to spend the rest of your life selling sugar water, or do you want a chance to change the world?” still echoes through the years. Jobs used the extrapolation bias to make a colossal business blunder when he was forced years later to leave Apple – the board members of Apple voted to expel Steve Jobs and support Sculley. The extrapolation bias of CEO’s has been investigated thoroughly by Harvard Business Review. Most successful CEO’s came from the same company where they worked for several years to hone their skills. CEO’s from other organizations who came with a reputation of excellence were much more prone to misunderstand the company culture and to fail as a result. Dr. Jack Welsh, the retired CEO of GE, advocated in his book to bring homegrown leaders from within the company. Welsh, during his tenure as a CEO, established and adopted the six sigma management style to train future CEO’s of GE prior to joining the rank of the company leadership team. Welsh believes homemade leaders in the company are able to absorb all of these previous mistakes of the company and avoid them.
This blog is published every week on Saturday before 10:00 pm. US Eastern time. Thank you for reading my blog. I would love to hear from you.