Are we successful due to skill or chance?
“Luck is not something you mention in the presence of self-made men,” American writer E.B White once wrote.
Whether it’s an interview, acceptance speech, or otherwise — when talented, hardworking people rise to the pinnacle of their profession, they tend to attribute their success to talent and hard work above all else. Most of these individuals are acutely aware of the amount of effort exerted and skill cultivated to perform at their level, but rarely do they verbally recognise the most probable factor of their success at all — luck.
In Julian Baggini’s book How The World Thinks he observes: “There seems little doubt that the Western imagination has too much faith in our capacity to direct and control our own destinies. It is bad faith to deny or even play down the respect to which we are the products of our societies, epochs, families, localities.”
Considering how frequently we steer clear of mentioning chance when it comes to narrating our path to success, could it be that one could become so masterful that their ability transcends the need for luck? Or, as much as we’d hate to admit it — is our success ultimately a product of luck?
Lucky me?
Probability has amnesia: each future outcome is completely independent of the past — Maria Konnikova in The Biggest Bluff: How I Learned to Pay Attention, Master Myself and Win
‘It all works out in the end,’ is a phrase I’m sure you’ve been told or even said as an attempt to console someone going through hardship. Whatever the reason, the phrase plays on an idea that in one way or another, a lot of us would like to believe — that ‘bad luck’ is only seasonal. However, when it comes to assessing the nature of variance, the belief that it ‘all works out in the end’ just doesn’t hold to be true.
In his 2018 book Factfulness: Gaining a Better (and More Hopeful) Perspective of Today’s World, statistician Hans Roling looks to debunk the mass-media myth that the world is much worse off today than ever before by deconstructing ten human instincts that distort our perspective. One of the instincts discussed is known as ‘The Destiny Instinct’, which is the tendency to believe that many entities (people, groups, institutions, or cultures) will continue to model their past characteristics and remain the same. To which Roling argues, just because change is occurring slowly — it does not mean that it is not occurring. Small changes compound over time and an easy way to test this theory is to talk to grandparents or those from two generations above about how life was. What ‘The Destiny Instinct’ shows us is how distorted our assessment of the past, present and future can be because we cannot accurately program variance and its domino effect.
One of the easiest ways to put our cognitive biases on the front street is through games. Game Design experts, Sid Meier and Rob Pardo talked about how often players turned to what is known as the “gambler’s fallacy” during games. This is the mistaken intuition that random events are spread evenly over time instead of clumping, randomly — as they do both. Players consistently misunderstood and became frustrated by randomness. As a result, both Meier and Pardo implemented the same solution to the problem, to alter the behavior of the game to correspond more closely to the player’s intuition about how randomness should behave. For example, if you have an event that is 50% likely to occur, and it doesn’t occur, then you make it 60% likely on the next attempt, and so on. Whilst games can be designed to reinforce our fallacious beliefs — life cannot and by being unable to separate our thinking about randomness in games and randomness in life, we remain destined for a rude awakening.
Maria Konnikova confirms our romanticisation with good luck in her book The Biggest Bluff: How I Learned to Pay Attention, Master Myself and Win, “We humans have wanted chance to be equitable for quite some time. Indeed, when we play a game in which chance doesn’t look like our intuitive view of it, we balk.” So whilst the notion of everything working out in the end is comforting, in reality, chance has no concept of fairness. This means when it rains, it very well may pour indefinitely. But the opposite is also true — when the good times roll, they may just continue rolling.
The lesson about chance is that it isn’t to be personified. Chance does not evenly distribute good and bad luck amongst a population. Chance just is and what we choose to do with chance is up to us. If anything, chance offers us a view of the world which is neither black nor white, but grey. It is an offering to the less egotistical of us to step away from our anecdotes of misfortune and consider seeing our environment in a non-binary way.
But, how we often choose to interpret chance contributing to our favoured outcome is where things start getting interesting.
The Illusion of Control
Uncertainty is an uncomfortable position. But certainty is an absurd one — Voltaire, French Philosopher
Back in her university days, Harvard psychology professor Ellen Langer was playing a game of poker when she noticed something interesting. Ellen was due to be dealt the next card, but the dealer mistakenly skipped her and dealt that card to the player to the left of her. This led to everyone yelling “misdeal!” in unison and scrapping that particular round. Ellen found this peculiar because, in poker, you are dealt cards face down, so why did the order in which the cards were dealt have such a profound impact on everyone’s view of the game being off-centre?
Ellen’s curiosity led to her forming the classic ‘coin toss experiment’ in 1975, where students had to guess the outcome of a series of coin tosses. Students were placed in three different groups, asked to guess heads or tails for multiple coin flips, and were then told whether they were correct. The key thing is that students were never shown the actual result, the researchers randomly predetermined which group would be “correct” or “incorrect” throughout the series of coin tosses. One group was “correct” more often near the beginning of the series of tosses, whereas another group was “correct” more often near the end of the series of tosses. The participants were then asked whether they thought they had a skill for guessing and whether they thought, with time, they could improve their skill. The outcome was fascinating in that those who guessed “correctly” nearer the beginning of the series felt they had a hunch for guessing and could improve over time. In contrast, those who guessed “incorrectly” nearer the beginning of the series felt the exact opposite.
In actuality, choosing the outcome of a coin toss isn’t much of a skill because each event is independent of its previous. So whether the last 99 times you have guessed correctly that a coin would land on heads, there remains a 50/50 chance that the 100th time could show either heads or tails.
What Ellen Langer’s experiment shows is that people find control so important that even in situations that are completely chance-determinant, they behave as though they have control. This exposes the gaps in our thinking when considering the proportion of skill relative to luck in outcomes. All too often, if one is experiencing unfavourable circumstances, it has to be some form of bad luck. But when one experiences favourable outcomes, it’s down to our skill — which provides a massively incomplete picture.
This is why disaster is significant. Disaster can and should act as an antidote to the feeling of control, especially when learning. If you have managed to fail at anything, congratulations. Losing is a humbling experience, perhaps more useful than triumph. There are evident teachings in failure that we would struggle to detect in success. Failure allows us to reassess our thinking, which is crucial to success. The beauty of failure is that the more painful the lesson learned, the longer we remember it and, hopefully, the less likely you will be to land in the same spot.
Success shouldn’t bring about an unrivalled level of certainty. Success should make you think harder about the actions that transpired to arrive at your win. No matter how smart your plan, your decision-making, or your strategy, luck likely played at least a small role. Some things happened that you didn’t predict. Some things happened that you didn’t — couldn’t — control.
The idea is to delicately believe that you have an impact on the outcome of your life. In 1966, Julian Rotter published the concept that revolves around whether the outcomes of our actions are contingent on what we do (internal locus) or events outside our control (external locus).
Further studies have shown that retaining an internal locus of control is an important part of our personalities and improves our overall health.
One of my favourite podcasts to listen to is Founders by David Senra, where he studies history’s greatest entrepreneurs from Phil Knight to Jeff Bezos. What is noticeable about each of these individuals is that they had evidenced a high degree of self-agency long before their success arrived. Research shown by Mamlin, Harris, and Case (2001) concluded that people higher up in organisational structures (which often time is a universal signal of success) also tend to be more internal. The individuals described on Founders are high-agency people — the world doesn’t happen to high-agency individuals. High agency individuals happen to the world.
Possessing a strong internal orientation is not solely what is required to cultivate success, another factor is also crucial — skill. Without a level of competence to match those who are self-determined, the internals can become psychologically unstable. So whilst internals are more likely to ‘achieve’ than externals due to their orientation, internals also require a sense of realism to experience success.
So, we’ve established one should probably not twiddle their thumbs and leave their lives to chance — that would be the equivalent of being in a casino and heading over to the Blackjack table and assuming you have a stronger chance than you do at winning big. I prefer to liken life to Poker, where you teeter between chance and skill. Where you can win with the worst hand possible and lose with the best too. What matters is developing the wherewithal to understand why, if, when, and how to play.
Skill
The essence of strategy is choosing what not to do — Michael E. Porter, in “What Is Strategy?” (1996)
Robin Hogarth’s studies show there are two types of learning environments: Kind and Wicked. In “kind” environments, learning and getting better follows a linear progression because patterns recur and the overall situation is constrained. An example of a kind environment would be chess because this is a situation of immediate feedback where the rules do not change. Each player has access to the same information, can see the consequences of every action, and can adjust accordingly.
On the opposite side of the spectrum is the “wicked” learning environment. “Wicked” environments have hidden or non-existent information, and even if the information is not hidden, the long feedback cycles make it such that you are forced to make decisions without a complete view. Unfortunately for us, life tends to veer toward the more “wicked” environment where the lessons gained from experience don’t guarantee a win.
Relying on luck in a wicked environment is a hope’s prayer. Instead, wicked environments require you to cultivate a level of skill in an attempt to manage the events of life. Poker is a game that I believe perfectly blends skill and chance in a wicked environment. If you have never really played or understood poker, here’s a quick rundown:
Each player gets dealt the same amount of chips to start the game.
Pre-flop (before the first three cards are shown on the board by the dealer), the two players directly to the left of the dealer must make a bet known as the “small blind” and “big blind.”
Each player gets dealt two cards face down that they can choose to look at or not to inform whether they will choose to “call” (match the bet) of the “big blind” to partake in the hand, “raise” (increase size of the existing bet in the round) or “fold” (discard your hand and forfeit interest in the current pot)
Once betting is complete, the dealer shows the “flop.” Betting takes place where players can “check” (refrain from betting, which you can only do if there are no other bets made) “call”, “raise” or “fold.”
Another card is shown by the dealer, known as “the turn” making it 4 cards on the board and another round of betting takes place.
The fifth and final card is shown, which is known as “the river” and betting takes place. By this point, if all bets are matched, a “showdown” occurs where all players left in the hand must show their cards — where the player with the strongest hand wins the pot. In the case of players having equally strong hands, the pot is split.
The chance portion of this poker is evident in this way: the two cards dealt out at the beginning of each round to each player are done so randomly, as is each of the cards from the flop, turn, and river.
What separates the “winners” from the “losers” over time is strategy. The actions you choose to make at a given moment has a considerable impact on your success in poker. Being a skilled strategic thinker in poker is important. From the beginning of the game through to the end, where you go “heads up” or 1v1, you are constantly responding to the new information presented by the cards being shown on the board or the actions of your opponent. For every action, you must think through your reaction. Questions like “What do I know? What have I seen? What is my risk-to-reward ratio?” must spring to mind.
The tricky thing about poker and the wickedness of life is that you may find yourself constantly searching for clues for more information to make better decisions and gain the slightest edge over chance. Each decision is made all the more uncertain because of the multiway action. Furthermore, each opponent has an interesting weapon in their arsenal that they can deploy whenever they please — “The Bluff.”
As you become more skilled, the game can become harder — assuming you’re playing against people at a similar level of understanding. A deeper understanding of any game leads you to see more of the different permutations each action can have. Understanding more of the domino effect of your actions can leave actors prone to ‘Analysis Paralysis,’ where you are trying to process too much data at once to the point where you struggle to act based on what is in front of you due to uncertainty.
The best way to build your strategy muscle is to play. You need to get a feel of the different situations that the game presents you with. If you pay attention, you will gather numerous strategies for your disposal during any given situation.
Whilst games are not the ultimate way to depict the ratio of skill relative to luck in success, they offer a decent framework. I conceptualised this basic diagram about how I think about the gravity of skill, relative to luck in games:
Figure 1: Graph showing the need for skill relative to chance in certain games
In games of chance, the value of skill naturally diminishes — as Ellen Langer’s coin flip study revealed earlier.
Frank Lantz’s view of poker encapsulates how unapologetic poker is in taking our misconceptions about the world and probabilities and beating us with them. Poker offers only the most dedicated, hardworking players an opportunity to slowly and painfully approach the truth.
Increasing your surface area of luck
A wise man once told me that luck isn’t some mystical energy that dances around the Universe randomly bestowing people with satisfaction and joy. You create your own luck. — JAY-Z, Fade to Black documentary
We arrive at the trillion-dollar question, “How can I get lucky?” Well, if we consider what we’ve studied, the ways listed below may not be full-proof but, they will definitely steer you in the right direction.
Get yourself out there — You want to avoid the “Description-Experience gap.” The “Description-Experience gap” is when you have studied all the theories but have no experience, leaving you with the illusion of knowledge. Experience beats theory. Test your hypotheses in the world.
Pay attention — A big part of ‘getting lucky’ is having the ability to recognise an opportunity. Study your environment and area of expertise thoroughly. Developing your awareness muscle will help you build a habit of examining every clue chance presents or, as the saying goes: “Where observation is concerned, chance favours only the prepared mind.”
Focus on your process — Only thinking about the end result is a recipe for disaster because it devalues the need for a detailed approach. Review your losses. Analyse, evaluate, and fine-tune your process at each step by questioning, “Why this action at this moment?”
Play to your strengths — We all love an underdog story. Whether it’s Rocky vs. Drago or The Karate Kid. But the truth is that rolling the dice in games of skill doesn’t favour the underdog. Give yourself an edge by playing in games where you are the odds-on favourite to win.
1 in 10 to the power of 2 million
Life’s single lesson: that there is more accident to it than a man can ever admit to in a lifetime and stay sane — Fausto Maijstral, in Thomas Pynchon’s V
1 in 10 to the power of 2 million. As a probability, this is practically 0. That’s the number that Dr. Ali Binazir’s study on our chances of being alive resulted in and if this is anything to go by then we may all be incredibly lucky.
The reality of life is that uncertainty isn’t the exception, it’s the rule. This means that we must come to terms with humanity and learn to control only what we can which is: how we think, how we act, and how we react.
Developing skills allows us to see the luck that life may be providing and in cases of bad luck, mitigate the damage which could ensue. What chance allows us to do is recall lucky breaks we might have enjoyed along the way or respect the game, in understanding that our number didn’t hit on the roulette this time.
The relationship between success, luck, and skill is a beautifully interconnected one. If we look a little deeper at the events of our lives, we can pay homage to both sides of the coin. American Astronomer and Planetary Scientist Carl Sagan once echoed this sentiment by saying, “If you want to make an apple pie from scratch, you must first create the universe.”
