Luck Vs. Skill
Decoupling One From The Other
Human beings love a good narrative. When an investor makes an incredible investment or a company rises to dominate its market, everyone (including they themselves) can’t wait to attach an origin story that explains how that success was achieved.
Bestselling how-to books are written, documentaries are made. Self-help gurus create road maps claiming that if you follow these 10 easy steps, you too can achieve success beyond your wildest dreams.
But the truth is that luck plays a huge role in outcomes. Yet the role of chance is often left out of the story — understandably, because no victor likes to hear that he or she was successful because of luck. Rather, everyone (including me) likes to think that they earned their success purely through diligence and skill.
Our Double Standard
The underestimation of luck results in a double standard — when we succeed we attribute it to skill, but when we fail we attribute it to bad luck.
This tendency massively negates our ability to learn from our mistakes (since we don’t actually think it’s mistake). And if good luck trumps a bad process, it reinforces our belief in that bad process going forward.
