28 Nov The Drunkard’s Walk (LEONARD MLODINOW) | Part B ‘
People systematically fail to see the role of chance in the success of ventures and in the success of people.
We afford automatic respect to superstar business moguls, politicians, and actors and to anyone flying around in a private jet, as if their accomplishments must reflect unique qualities not shared by those forced to eat commercial-airline food. And we place too much confidence in the overly precise predictions of people—political pundits, financial experts, business consultants—who claim a track record demonstrating expertise.
One large publishing company I’m familiar with went to great pains to develop one-year, threeyear, and five-year plans for its educational software division. There were high-paid consultants, lengthy marketing meetings, late-night financial-analysis sessions, long offsite afternoon powwows. In the end, hunches were turned into formulas claiming the precision of several decimal places, and wild guesses were codified as likely outcomes. When in the first year certain products didn’t sell as well as expected or others sold better than projected, reasons were found and the appropriate employees blamed or credited as if the initial expectations had been meaningful. The next year saw a series of unforeseen price wars started by two competitors. The year after that the market for educational software collapsed. As the uncertainty compounded, the three-year plan never had a chance to succeed. And the five-year plan, polished and precise as a diamond, was spared any comparison with performance, for by then virtually everyone in the division had moved on to greener pastures.
Historians, whose profession is to study the past, are as wary as scientists of the idea that events unfold in a manner that can be predicted. In fact, in the study of history the illusion of inevitability has such serious consequences that it is one of the few things that both conservative and socialist historians can agree on. The socialist historian Richard Henry Tawney, for example, put it like this: “Historians give an appearance of inevitability…by dragging into prominence the forces which have triumphed and thrusting into the background those which they have swallowed up.” And the historian Roberta Wohlstetter, who received the Presidential Medal of Freedom from Ronald Reagan, said it this way: “After the event, of course, a signal is always crystal clear; we can now see what disaster it was signaling…. But before the event it is obscure and pregnant with conflicting meanings.”
In some sense this idea is encapsulated in the cliché that hindsight is always 20/20, but people often behave as if the adage weren’t true. . The study of randomness tells us that the crystal ball view of events is possible, unfortunately, only after they happen. And so we believe we know why a film did well, a candidate won an election, a storm hit, a stock went down, a soccer team lost, a new product failed, or a disease took a turn for the worse.
It is easy to concoct stories explaining the past or to become confident about dubious scenarios for the future. That there are traps in such endeavors doesn’t mean we should not undertake them. But we can work to immunize ourselves against our errors of intuition. We can learn to view both explanations and prophecies with skepticism. We can focus on the ability to react to events rather than relying on the ability to predict them, on qualities like flexibility, confidence, courage, and perseverance. And we can place more importance on our direct impressions of people than on their well-trumpeted past accomplishments. In these ways we can resist forming judgments in our automatic deterministic framework.
In complex systems (among which I count our lives) we should expect that minor factors we can usually ignore will by chance sometimes cause major incidents.
In his theory Perrow recognized that modern systems are made up of thousands of parts, including fallible human decision makers, which interrelate in ways that are, like Laplace’s atoms, impossible to track and anticipate individually. Yet one can bet on the fact that just as atoms executing a drunkard’s walk will eventually get somewhere, so too will accidents eventually occur. Called normal accident theory, Perrow’s doctrine describes how that happens—how accidents can occur without clear causes, without those glaring errors and incompetent villains sought by corporate or government commissions. But although normal accident theory is a theory of why, inevitably, things sometimes go wrong, it could also be flipped around to explain why, inevitably, they sometimes go right. For in a complex undertaking, no matter how many times we fail, if we keep trying, there is often a good chance we will eventually succeed. In fact, economists like W. Brian Arthur argue that a concurrence of minor factors can even lead companies with no particular edge to come to dominate their competitors. “In the real world,” he wrote, “if several similar-sized firms entered a market together, small fortuitous events—unexpected orders, chance meetings with buyers, managerial whims—would help determine which ones received early sales and, over time, which came to dominate. Economic activity is…[determined] by individual transactions that are too small to foresee, and these small ‘random’ events could [ac]cumulate and become magnified by positive feedbacks over time.”
The same phenomenon has been noticed by researchers in sociology. One group, for example, studied the buying habits of consumers in what sociologists call the cultural industries—books, film, art, music. The conventional marketing wisdom in those fields is that success is achieved by anticipating consumer preference. In this view the most productive way for executives to spend their time is to study what it is about the likes of Stephen King, Madonna, or Bruce Willis that appeals to so many fans. They study the past and, as I’ve just argued, have no trouble extracting reasons for whatever success they are attempting to explain. They then try to replicate it.
That is the deterministic view of the marketplace, a view in which it is mainly the intrinsic qualities of the person or the product that governs success. But there is another way to look at it, a nondeterministic view. In this view there are many high-quality but unknown books, singers, actors, and what makes one or another come to stand out is largely a conspiracy of random and minor factors —that is, luck. In this view the traditional executives are just spinning their wheels.
In our lives, too, we can see through the microscope of close scrutiny that many major events would have turned out differently were it not for the random confluence of minor factors, people we’ve met by chance, job opportunities that randomly came our way. For example, consider the actor who, for seven years starting in the late 1970s, lived in a fifth-floor walk-up on Forty-ninth Street in Manhattan, struggling to make a name for himself. He worked off-Broadway, sometimes far off, and in television commercials, taking all the steps he could to get noticed, build a career, and earn the money to eat an occasional hanger steak in a restaurant without having to duck out before the check arrived. And like many other wannabes, no matter how hard this aspiring actor worked to get the right parts, make the right career choices, and excel in his trade, his most reliable role remained the one he played in his other career—as a bartender. Then one day in the summer of 1984 he flew to Los Angeles, either to attend the Olympics (if you believe his publicist) or to visit a girlfriend (if you believe The New York Times). Whichever account is accurate, one thing is clear: the decision to visit the West Coast had little to do with acting and much to do with love, or at least the love of sports. Yet it proved to be the best career decision he ever made, most likely the best decision of his life.
The Drunkard’s Walk