Sometimes we just know something will happen and it does. But experts say channeling that experience into decision-making is an error that leads to mistakes.
On 8 November 2016 – US election night – the betting odds of Donald Trump winning the presidency had narrowed to five to one. By the following morning, he'd managed to pull off a feat many thought impossible, but that didn't stop the I-told-you-sos – friends, family members and even online soothsayers – who claimed to have known all along that Trump would triumph despite such bad odds.
To a lesser extent it happened in November 2008 too, when Barack Obama won the election. After accepting the Democratic nomination three months earlier, his chance of victory hovered around 60%. When he won, you may well have been one of those who ‘knew’ that was going to be the outcome, and imagined that his odds of winning had been much, much higher. But just because he won didn’t change his odds of winning prior to his victory.
This is hindsight bias – a phenomenon in which we revise probabilities after the fact or exaggerate the extent to which past events could have been predicted beforehand. Politics doesn’t have a monopoly on this: we’re guilty of hindsight bias when we talk about the weather (there’s only a 20% chance of rain, but you say it’s going to rain and it does, and suddenly you have better forecasting ability than the experts); it happens at sporting events, in court rooms, in medical decisions and in business.
In fact, hindsight bias is one of the most widely studied of what are known as ‘decision traps’, in which people routinely employ mental shortcuts tosimplify decisionswhen they're not certain; decisions that are often skewed by cognitive biases: we guess something improbable will happen and it does, but those probabilities never changed – and, believe it or not, nobody possesses supernatural abilities.
Causes and consequences
According to Nobel Prize-winning American economist Richard Thaler, businesses may be more prone to hindsight bias than other entities. In one study, researchers foundthat 77.3% of entrepreneurs in charge of failed start-ups believed that – before the failure – their company would grow into a successful business. After they failed, only 58% said they had originally believed their company would be a success.
In an interviewThaler gave to business magazine McKinsey Quarterly, he said if a CEO decided to gamble on an idea that looked good, then a few years later it turned out a competitor came up with a better product, “the CEO is going to remember, ‘I never really liked this idea’”.
Thaler says a simple fix could be to write things down; to make a record of how a decision was made at the time so that companies can learn lessons after the event. “Any company that can learn to distinguish between bad decisions and bad outcomes has a leg up,” he says. “Memorialise the fact that the CEO and the other people that have approved this decision all have the same assumptions, that no competitor has a similar product in the pipeline, that we don't expect a major financial crisis.”
Kathleen Vohs, a social scientist at the University of Minnesota's Carlson School of Management,co-authored a 2012 paper on hindsight biaswhich found that its consequences included “myopic attention to a single causal understanding of the past (to the neglect of other reasonable explanations) as well as general overconfidence in the certainty of one’s judgements”.
Vohs says some are more prone to hindsight bias than others. If, for example, you are in the kind of profession where you receive a lot of timely and clear feedback before you render a decision, like accounting, you’ll tend to show a smaller level of hindsight bias.
Much of the business world, though, is unclear in terms of what causes success or failure – which is often due to multiple factors. “When you have ambiguity like that… people can come up with a mental causal pathway in which they believe they can see how something would have occurred - ‘oh, I can see very clearly how that would have happened’ – [then] you have a higher level of hindsight bias,” she says.
Drew Boyd, executive director of the University of Cincinnati’s MSc Marketing programme, says one direct result of hindsight bias is something called stereotypy. “It happens in business a lot when you think that something that has happened before is going to happen again. It seems to make sense. But then it doesn’t happen again and you wonder what happened.”
“Business people will decide on a strategy because it worked for them before. But the conditions in the next environment are going to be different: it’s a different market situation, different people, and it’s a mistake to immediately assume that what worked before is going to work again.”
How to de-bias and improve your decision-making
Boyd says a good way to avoid such errors is to start again: “Consider what happened before, but fold in new pieces of information, widen the field, incorporate new data along with old data. What people have to remember is they’re succumbing to an even broader bias called omission neglect – a tendency to consider only the evidence we have available to us.”
The saying goes that hindsight is 20:20, but Boyd says it’s worse than that. “It makes people think they can look back at past events and interpret something; it makes them think they have new ability to predict.” He says that in order to correct for hindsight bias, you have to realise you don’t possess a crystal ball.
“We try to teach people to use what we call Bayesian thinking. [Eighteenth Century English statistician] Thomas Bayes’s premise was to consider all sources of information but weight them: some information is more valuable, but all information has some value. Weight that information appropriately and you tend to make the best decision… make decisions based on what the data says is likely to happen, not what you think is going to happen.”
American businessman Warren Buffet, Boyd says, has a formula he calls ‘value investing’. “He follows it, but he knows the odds of succeeding are what they are. He doesn’t always hit magic; he loses occasionally, but he doesn’t say the odds were against him those times. Successful people understand risk for what it is and don’t make revisions in hindsight. Go with the odds, not the gods.”
Kathleen Vohs says there is one de-biasing tactic she favours known as the ‘consider the opposite strategy’. Before rendering a decision you should flip it and think: how could this not have gone the way you anticipated? “Once you have your little narrative in your mind, think: how could the outcome go in a different direction or not occur at all?” she says. “If you flip the script like that in a number of ways you can reduce hindsight bias.”
Vohs says this method has the effect of disrupting your confidence. “Anything that reduces people's confidence in predicting something will happen or the pathway in which something will happen is a good way to go about it.”
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When it comes to politics and international diplomacy, names matter. We know they matter because people are always changing them. Two important addresses changed this week
The Russian embassy in Washington found itself situated not on Wisconsin Street but Boris Nemtsov Plaza, named after a Russian opposition politician.
And in Turkey, the embassy of the United Arab Emirates is now on Fahreddin Pasha Road.
The Turkish situation was very 2018 in that it was the result of a Twitter feud.
The foreign minister of the United Arab Emirates, Abdullah bin Zayed al Nahyan, shared a tweet alleging that a century ago, the Turkish Ottoman military commander Fahreddin Pasha had mistreated Arabs while he was governor of the holy city of Medina.
The allegation was compounded by an accusation that ancestors of the current Turkish president Recep Tayyip Erdogan were involved in the mistreatment too.
Mr Erdogan was not happy.
Image copyrightAFP/GETTYImage captionTurkish television carried footage of the street signs being changed
One politician in Moscow called the name change "a dirty trick".
Image copyrightGETTY IMAGESImage captionA fierce critic of Vladimir Putin, Boris Nemtsov was fatally shot near the Kremlin in 2015
These are just the latest examples of the centuries-old recognition of the power and importance of names.
If you search online for the address of the United Kingdom embassy in Tehran, Iran, you'll be told that it's 198 Ferdowsi Avenue.
Iranians got good at changing names in the early 1980s. Thousands of streets and buildings named for the regime of the deposed shah were instead dedicated to mark the Islamic revolution.
In what was originally a prank, a group of students changed the signs where the British embassy was located to read "Bobby Sands Street", after the high-profile IRA activist who died in prison on hunger strike while serving a sentence for firearms offences.
Weirdly, the name stuck. So instead of having an official address which memorialised someone who considered the British state the enemy, British embassy staff decided to start using the back door instead, thereby changing their postal address.
And as Ferdowsi is considered to be the Persian national poet, perhaps they reasoned a street named after him was safe from being changed.
If renaming streets is controversial, renaming whole countries is critical.
You don't hear the phrase Upper Volta on the BBC any more. Burkina Faso - or land of the upright people - tells us that this is a country no longer colonised by another nation - the French - who decided that the best way to denote the territory would be a purely geographical one.
The break-up of Yugoslavia in the 1990s revived the idea of Macedonia as a nation. But Macedonia is also the name of the bordering region of Greece. So what to call the new country?
Independent Macedonia? Republic of Macedonia? Negotiations over the use of the name have been going on ever since with little sign of a breakthrough - until now.
Image copyrightGETTY IMAGESImage captionMatthew Nimetz is hopeful that Greece and Macedonia can settle their naming dispute
So the clock may be ticking for "the Former Yugoslav Republic of Macedonia", or FYROM, the inelegant fudge which has been used in the meantime.
Names matter whether you're talking about a street, a country or a human being.
When he became a Muslim, it meant a lot to Cassius Clay that he be known to the world as Muhammad Ali.
It took six more years until US newspapers stopped calling Ali by what he deemed his "slave name". And the reason we attach so much importance to names is that they tell the world something about us.
It can be something unique. Brazilian footballers traditionally go by nicknames. Edson Arantes do Nascimento means almost nothing. Pele means everything.
Image copyrightGETTY IMAGESImage captionEdson Arantes do Nascimento, aka Pele
That's despite the man considered by some to be the greatest ever football player saying in his autobiography that he has no idea where the name came from.
So there's power in choosing a name, power in changing it, and - as both religion and mythology tell us - power in guarding it.
My partner and I are being assessed as prospective adopters at the moment. We've been told about the importance of identity to a child who has suffered loss and trauma.
We're told that changing a child's birth name, no matter how much you might dislike it, could be damaging.
Imagine having nothing but your name, and having that taken away by the new parents you were told would love and protect you.
In Jewish tradition, only the high priest in the Temple of Jerusalem was allowed to utter the four-letter name of God - and even then only once a year.
The Egyptian goddess Isis gained complete power of the sun god Ra when she learned his true name.
So what we call things can border on the magical. Names matter.
As a freelancer working solo from home, while my housemates head out to work, I justified a very active social life as basic human necessity. Yet when it dawned on me just how much time I was spending socialising, I realised I may be taking it to an extreme.
I calculated that, on average, I was spending 22 hours or more each week on social activities. So, in a bid to see what would happen to my work output, health and wellbeing, I decided to try and cut out my social life entirely.
I knew, at times, I filled my schedule simply out of fear of missing out (FOMO), an inability to say no, but also as a sneaky way to procrastinate or shift focus away from my work.
Idle moments are crucial for creativity and mind wandering has been linked to creative problem solving (Credit: Getty Images)
For one month, I declined all in-person activities with friends: going out for drinks; coffee catch-ups; dinners; parties and non-work related events, to see if it would make me more productive, improve my focus and career prospects.
Thirty-one days later
On day one of the month-long experiment, I had to confront some deep-seated anxiety over missing out. For me, FOMO often stems from a tyranny of choice – when there are several enticing options available for a Saturday night, how do I know I’m making the right choice?
For me, FOMO often stems from a tyranny of choice
But as the days passed, the FOMO began to subside and I started to relax. I only had one option to consider for Saturday night – to stay home – and this limitation left me more satisfied in my decision. I used to berate myself for staying in on a Friday night or leaving an event too early, but during the experiment I felt more content working, reading or watching Netflix instead of dwelling on the other things I could be doing.
A fun-free schedule also allowed for more ‘deep work’ (something computer science professor, Cal Newport, defines as the ability to focus without distraction on a cognitively demanding task). No longer distracted by what I could be doing, or what fun everyone else was having, I was able to build concentrated pockets of work into my week at times that were usually reserved for socialising, such as spending Friday nights doing admin or Saturday mornings writing in a café.
I came to embrace doing nothing and relish the moments of solitude
Embrace boredom
While I found more time to work, I also noticed a change in my overall health and wellbeing. I found myself cooking more at home, doing daily exercise, getting to bed earlier each night, reading, and relishing moments of rest and boredom throughout the day.
Even with a new-found appreciation for cooking and spin classes, having no social life left me with more free time than I’d imagine, and the boredom and loneliness often associated with ‘doing nothing.’
Fear of Missing Out can lead to filling out your calendar just to feel busy (Credit: Getty Images)
I came to embrace doing nothing and relish the moments of solitude. I went on meandering walks, sat at cafés without any technology, and found myself daydreaming more frequently as I was no longer attempting to fill every spare moment.
Such idle moments are crucial for creativity, and mind wandering has been linked to creative problem solving. When your mind is able to wander, it is accessing memories, emotions and random bits of stored knowledge, says Amy Fries, author of Daydreams at Work: Wake Up Your Creative Powers and a writer and editor for Psychology Today.
During the experiment I found myself regularly brainstorming new ideas and reimagining existing projects.
Doing nothing can be as equally energising as time out spent with people, and is in fact necessary in order to recharge, says Pedro Diaz, CEO of the Workplace Mental Health Institute in Sydney.
There is research to support his claim: a 2016 study of 48 people, which measured their mental state, mood, fatigue and stress over 12 days, found that extraverted behaviour raised people’s moods and energy levels – but this behaviour also led to higher fatigue after a three-hour delay. While a small sample, it does support the idea that focused activity – be it socialising, working or studying – takes its toll.
Perhaps it’s not the amount of socialising or work we engage in that can lead to exhaustion, but the lack of proper breaks from either
This observation raised an important question – perhaps it’s not the amount of socialising or work we engage in that can lead to exhaustion, but the lack of proper breaks from either.
“We don't place enough importance on being alone and most people don't even know what they need to do to give their brain and their nervous system a good rest,” says Diaz.
In a society where busyness is worn as a badge of honour, it can be difficult to decipher if having little-to-no social life is an inevitable consequence of working life, or a way to signal our own importance to others.
Extraverted behaviour raises people’s moods and energy levels but also leads to higher fatigue after a three-hour delay (Credit: Getty Images)
“When you signal you're busy, you’re basically telling others that you are high status and important, not because what you wear is expensive, but [because] you are extremely desired and in high demand,” says Silvia Bellezza, co-author of a Harvard Business School study that argues that and overworked lifestyle, rather than a leisurely lifestyle, has become an aspirational status symbol.
The pitfalls of no friends
The positive effects of solitude – for example, increased clarity of thought and a sense of feeling recharged – would be a concern if I remained isolated in my antisocial bubble at home for too long.
For many working in an office environment, socialising is one of the most important elements of working life and people with a ‘best friend’ at work are seven times more likely to engage fully in their work. Workplace camaraderie also creates a common sense of purpose and a social support network that can lead to promotions and professional advice.
It’s not the amount of socialising or work we engage in that can lead to exhaustion but the lack of proper breaks from either (Credit: Alamy)
Of course, off-hours socialising is also an important way to build work contacts. While one month of no social life did not impact my relationship with existing clients, if I continued it may have diminished my ability to build new ones.
Work and play
Rather than striving for a distinct work-life balance, we may be better off trying to bring our social life into our work. It occurred to me that perhaps the secret to a successful career is not cutting out your social life, but integrating the two.
Ellen Galinsky, co-founder of the Families and Work Institute, has found that people who are dual-centric – having more than one interest or central focus with equivalent priority – are the most satisfied in their lives overall.
“We find that people who are dual-centric tend to be healthier, do better at work and do better at home,” says Galinsky. “If you have just one focus in your life and something goes wrong, it's pretty devastating. If you have other things that are important to you – it might be something creative, playing a sport, community, or having a circle of friends, you tend to do better overall.”
During the experiment, I didn’t simply replace my newfound spare time with extra work but rather became more dual-centric. I was able to build in more concentrated pockets of work where I otherwise wouldn’t, but I also gravitated to activities that were previously neglected – the gym, practising the piano, and meditation.
I’ve learned that I can’t neatly cut out an area of life in order to propel another – a connection with people is inextricably linked to our work and helps us deal with life’s inevitable ups and downs.
Post-experiment, I have redefined what success looks like to me – it isn’t all work, or all play, or all balance, but a mix of different engagements within each day, and a steady smattering of breaks in between.
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The Russian embassy in Washington found itself situated not on Wisconsin Street but Boris Nemtsov Plaza, named after a Russian opposition politician.
And in Turkey, the embassy of the United Arab Emirates is now on Fahreddin Pasha Road.
The Turkish situation was very 2018 in that it was the result of a Twitter feud.
The foreign minister of the United Arab Emirates, Abdullah bin Zayed al Nahyan, shared a tweet alleging that a century ago, the Turkish Ottoman military commander Fahreddin Pasha had mistreated Arabs while he was governor of the holy city of Medina.
The allegation was compounded by an accusation that ancestors of the current Turkish president Recep Tayyip Erdogan were involved in the mistreatment too.
Mr Erdogan was not happy.
AFP/GETTY
GETTY IMAGES
GETTY IMAGES
GETTY IMAGES
