Drunkard's Walk - Leonard Mlodinow [97]
The subjects in Langer’s experiments “knew,” at least intellectually, that the enterprises in which they were engaging were random. When questioned, for example, none of the participants in the trading-card lottery said they believed that being allowed to choose their card had influenced their probability of winning. Yet they had behaved as if it had. Or as Langer wrote, “While people may pay lip service to the concept of chance, they behave as though chance events are subject to control.”43
In real life the role of randomness is far less obvious than it was in Langer’s experiments, and we are much more invested in the outcomes and our ability to influence them. And so in real life it is even more difficult to resist the illusion of control.
One manifestation of that illusion occurs when an organization experiences a period of improvement or failure and then readily attributes it not to the myriad of circumstances constituting the state of the organization as a whole and to luck but to the person at the top. That’s especially obvious in sports, where, as I mentioned in the Prologue, if the players have a bad year or two, it is the coach who gets fired. In major corporations, in which operations are large and complex and to a great extent affected by unpredictable market forces, the causal connection between brilliance at the top and company performance is even less direct and the efficacy of reactionary firings is no greater than it is in sports. Researchers at Columbia University and Harvard, for example, recently studied a large number of corporations whose bylaws made them vulnerable to shareholders’ demands that they respond to rough periods by changing management.44 They found that in the three years after the firing there was no improvement, on average, in operating performance (a measure of earnings). No matter what the differences in ability among the CEOs, they were swamped by the effect of the uncontrollable elements of the system, just as the differences among musicians might become unapparent in a radio broadcast with sufficient noise and static. Yet in determining compensation, corporate boards of directors often behave as if the CEO is the only one who matters.
Research has shown that the illusion of control over chance events is enhanced in financial, sports, and especially, business situations when the outcome of a chance task is preceded by a period of strategizing (those endless meetings), when performance of the task requires active involvement (those long hours at the office), or when competition is present (this never happens, right?). The first step in battling the illusion of control is to be aware of it. But even then it is difficult, for, as we shall see in the following pages, once we think we see a pattern, we do not easily let go of our perception.
Suppose I tell you that I have made up a rule for the construction of a sequence of three numbers and that the sequence 2, 4, 6 satisfies my rule. Can you guess the rule? A single set of three numbers is not a lot to go on, so let’s pretend that if you present me with other sequences of three numbers, I will tell you whether or not they satisfy my rule. Please take a moment to think up some three-number sequences to test—the advantage of reading a book over interacting in person is that in the book the author can display infinite patience.
Now that you have pondered your strategy, I can say that if you are like most people, the sequences you present will look something like 4, 6, 8 or 8, 10, 12 or 20, 24, 30. Yes, those sequences obey my rule. So what’s the rule? Most people, after presenting a handful