Sunday, January 27, 2013

The Role of Chance

Business is frightfully competitive. So we tend to believe only the fittest survive.

But success may take more luck than pluck.

Investment strategist Michael Mauboussin thinks so.
He claims we're too quick to discount the role chance plays in business.
“People attempt to extract lessons from what is mostly a random process,” Mauboussin tells readers of Inc.

“Once something has been successful, we start to believe it was the only thing that could have happened.”

By idolizing business winners, Mauboussin says, we forget there were others who followed the same strategies, but failed.
Remembering those failures helps you “keep your mind open to other possibilities,” he says.

Paleontologist Stephen Jay Gould observed the same thing in nature. Gould thought chance was a deciding factor in the evolution of life on earth.
He based his conclusions on fossilized animals discovered in Canada’s Burgess Shale.

The animals in the Burgess Shale were all exquisitely suited to their environment. But none left modern descendants.

From the fact, Gould concluded that fitness is no guarantee of survival.
Survival is really a matter of luck.
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