hindsight by nimish gogri on flickr (https://www.flickr.com/photos/25146185@N04/5216427409/)

David McRaney on cognitive bias

Mcraney-picI first read David McRaney’s blog a while ago, and found him to be a likeable contrarian, pointing out the silly ways we’re easily led astray. As someone who spends a lot of time telling people to listen to data, it’s clear to me that data alone isn’t the answer: despite the best facts, we’re delusional.

David spends his life chronicling these delusions.

A few months later I convinced him to take the stage at O’Reilly’s Strata conference, where I met him in person, and he didn’t disappoint. We agreed to follow up, and the result was this 40-minute-long, wide-ranging chat. We talk about Facebook’s acquisition strategy (“boy, does Oculus look like the future!”), how the Internet is changing social expectations, why we argue, and of course common mistakes like hindsight, confirmation, and survivorship bias.

The conversation is full of useful nuggets for those trying to create change. Consider the Backfire Effect.

… probably the worst thing you will ever hear is this thing called the backfire effect … Let’s say you ask somebody, “Were there weapons of mass destruction in Iraq?” And they say, “Yes, I believe they were.” And then you hand them a news story that says there were weapons of mass destruction in Iraq and you ask them to rate on a scale of 1 to 10 how much do you believe this story is true, and they rate it maybe a 7.

And then you hand them a correction and say, “Actually, that story is not true. There is new information that has come to light. It turns out there were not weapons of mass destruction in Iraq.” Then you ask them, “How do you now feel about the original story?” They would now rate it as higher. It will go up.

So when people receive disconfirmatory evidence, they tend to dig in their heels and believe deeper in the original belief instead of going, ah, I was wrong. So that like—the scientific method and the scientific way of thinking is unnatural, it seems.

David has good advice for organizations in the midst of change and uncertainty, too: Be lucky.

“You need to have a plan in your organization for how you deal with chaos. And the research suggests that individual human beings who interact with chaos in a certain way are what we call “lucky” and other types of people who interact with it in a different way are what we call “unlucky”. And when you look back on the track record of any company, what was the driving force behind all their success was luck. Not skill, not intelligence, not acumen, not insight, not genius—those things are all important, [but] what usually happens in aggregate is luck.

The way most people see luck is pre-scientific thinking. It’s like looking at the sky as constellations before you know what stars are. There is a post scientific understanding of luck—anyone who is interested can look up Richard Wiseman, who has done 10 years of research into it. What he basically found was that lucky people fail a lot and have this attitude of when they fail, they don’t really think about it.

When they enter into new situations, they are not goal-oriented. They are opportunity-oriented. So they go to a party not hoping to find the love of their life—if that happens, that’s great—but if they meet some cool people who are interested in paintball or something, or they meet some people who are working on a project that they’d like to be part of, that then becomes why they went to that party in hindsight. And they don’t feel like they failed in finding their true love.”

When it comes to business models and dealing with innovation, it’s all about opportunities.

“I think any business plan … that is built solely upon being competent in your future predictions is a recipe for failure. It should be more about how you deal with chaos, how you deal with randomness, how you deal with chance, and whether you’re setting yourself up to take advantage of opportunities that arise in that kind of scenario.”

Definitely worth listening to. And check out David’s amazing blog for more insights. You’ll come away realizing you are indeed not so smart—and that, as it turns out, is OK.

Here’s the audio:

Here’s the video.

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