The Success Equation. Michael J. Mauboussin

and the Post Hoc Fallacy

      John Lewis Gaddis, a professor of history at Yale, creates a vivid image of how we represent time. He suggests that the future is a zone where skill and luck coexist independently. Almost everyone recognizes that many more things could happen than will happen. A wide range of events might occur, but won't. These possibilities come down a funnel to the present, which fuses skill and luck to create whatever happens. The conversion of a range of alternatives into a single event is the process that makes history.²

      For example, you undoubtedly trust your skill at driving well enough to get to the grocery store and back without dying. But when you pull out onto the road, you're facing a wide range of possible histories for this journey. In one of them, the engine falls off of the Boeing 767 going overhead and lands on your car and kills you. In another, you turn in front of a motorcyclist you happen not to see, and you kill him. In yet another, a tractor trailer loses its brakes and plows into you from behind, putting you in the hospital for a month. In fact, in this instance, you drive to the store, buy your groceries, and go home. The history of this event was that you didn't die. Was it your skill as a driver that saved your life? Or was it luck?

      If we look into the past, skill and luck appear to be inextricably fixed, even though the history that we lived through was but one of many possible histories that could have occurred. While we are capable of contemplating a future pulsating with possibility, we quickly forget that our experience was one of many that could have been. As a consequence, often we draw lessons from the past that are wrong. For example, you could conclude that you're such a skillful driver that you really stand no chance of being in an accident. That's a very dangerous conclusion.

      Humans love stories.³ They are one of the most powerful and emotive ways that we communicate with one another. Our parents told us stories, and we tell them to our children. People tell stories to teach lessons or to codify the past. The oral tradition of storytelling goes back thousands of years and predates writing. All stories have common elements. There is a beginning, some inciting episode that launches a sequence of events. The storyteller explains why events unfolded as they did, though he may be inventing those causes. As the story proceeds, the action rises. Complications occur. Interesting stories have an element of suspense and surprise. We get invested in a story when there is something at stake, when the tension mounts, and when events occur that upset our expectations. And stories have a climax and a resolution: the protagonist wins or loses, and then the tension is released as things settle down once more.

      The need to connect cause and effect is deeply ingrained in the human mind.⁴ When we see an effect, we naturally seek the cause. Michael Gazzaniga, a professor of psychology at the University of California, Santa Barbara, has worked with patients who have undergone surgery to sever the corpus callosum, the bundle of nerves that connects the right and left hemispheres of the brain. This surgery is a treatment for severe epilepsy. Gazzaniga and his colleagues were able to learn just how each hemisphere functions because in these patients the two halves of the brain cannot communicate with each other and so must function in isolation.

      One of their main conclusions was that the left hemisphere “includes a special region that interprets the inputs we receive every moment and weaves them into stories to form an ongoing narrative of our self-image and our beliefs.”⁵ Gazzaniga calls this region the interpreter. One of the left hemisphere's main jobs is to make sense of the world by finding a cause for every effect, even if the cause is nonsensical.

      In one experiment, Gazzaniga showed a split-brain patient two cards with images on them. The patient's left eye (controlled by the right hemisphere) saw a snowy scene. The patient's right eye (controlled by the left hemisphere) saw a chicken's foot. When asked to pick a card that related to what he saw, the patient picked a shovel with his left hand (right hemisphere) and a chicken with his right hand (left hemisphere). In other words, each hemisphere independently came up with an appropriate response. For example, the right hemisphere correctly chose something related to what it had seen: a snow shovel for the snow. However, in most people, the right hemisphere has no ability to express language. And all the left hemisphere knew about was a chicken's foot and the image of a shovel that it inexplicably chose. How could he resolve the conflict? Make up a story. When the researchers asked the patient why he picked what he did, the interpreter in the left brain kicked into gear: “Oh, that's simple. The chicken claw goes with the chicken, and you need a shovel to clean out the chicken shed.” Rather than saying, “I don't know,” the left hemisphere made up a response based on what it knew.⁶

      Steven Pinker, a psychologist at Harvard, calls this part of the left hemisphere the baloney-generator. He wrote, “The spooky part is that we have no reason to believe that the baloney-generator in the patient's left hemisphere is behaving any different from ours as we make sense of the inclinations emanating from the rest of our brains. The conscious mind—the self or soul—is a spin doctor, not the commander in chief.”⁷ Gazzaniga's patient simply reveals what's going on in all of our heads.

      To explain the past, we also naturally apply the essential elements of stories: a beginning, an end, and a cause.⁸ As events in our world unfold, we don't—really, can't—know what's happening. But once we know the ending, we stand ready to create a narrative to explain how and why events unfolded as they did.⁹ For our purpose, the two critical elements required for analyzing the past are that we already know the ending and that we want to understand the cause of what happened. Those two elements are what get us into trouble. Most of us will readily believe that this happens to others. But we are much more reluctant to admit that we can fall prey to the same bias.

      We often assume that if event A preceded event B, then A caused B. Even Nassim Taleb, who has done a great deal to raise the awareness of the role of randomness and luck in our daily lives, points the finger at himself in this regard. He tells this story: Every day, he used to take a cab to the corner of Park Avenue and 53rd Street in New York City and take the 53rd Street entrance to go to work. One day, the driver let him out closer to the 52nd Street entrance and threw Taleb off his routine. But that day, he had great success at his job trading derivatives. So the next day, he had the cab driver drop him off on the corner of Park and 52nd Street so that he could extend his financial success. He also wore the same tie he had worn the day before. He obviously knew intellectually that where he got out of the cab and which tie he wore had nothing to do with trading derivatives, but he let his superstition get the best of him. He admitted that, deep down, he believed that where he entered the building and what tie he wore were causing him to succeed. “On the one hand, I talked like someone with strong scientific standards,” he continued. “On the other, I had closet superstitions just like one of these blue-collar pit traders.”¹⁰ Taleb entered the building from 52nd Street and then made money; therefore entering the building from 52nd Street caused him to make money. That faulty association is known as the post hoc fallacy. The name comes from the Latin, post hoc ergo propter hoc, “after this, therefore because of this.” A lot of the science done in the last two hundred years has been aimed at doing away with that mistaken way of thinking.

      Knowing the end of the story also leads to another tendency, one that Baruch Fischhoff, a professor of psychology at Carnegie Mellon University, calls creeping determinism. This is the propensity of individuals to “perceive reported outcomes as having been relatively inevitable.”¹¹ Even if a fog of uncertainty surrounded an event before it unfolded, once we know the answer, that fog not only melts away, but the path the world followed appears to be the only possible one.

      Here is how all of this relates to skill and luck: even if we acknowledge ahead of time that an event will combine skill and luck in some measure, once we know how things turned out, we have a tendency to forget about luck. We string together the events into a satisfying narrative, including a clear sense of cause and effect, and we start to believe that what happened was preordained by the existence of our own skill. There may be an evolutionary reason for this. In prehistoric times, it was probably better for survival to take the view that we have some control over events than to attribute everything to luck and give up trying.

      John Glavin is a professor of English at Georgetown University who teaches courses in writing for the stage and screen. Glavin spends a great