You’re Missing What You’re Missing — The Dangers of Survivorship Bias

There is value in understanding failure.

Fundamentally, no amount of capital, strategic planning or brilliant execution can prevent a company from repeating the mistakes of those who have previously tried yet failed, if they don’t seek to identify and understand what those mistakes were.

Imagine that you’re a flight commander during WWII and you’re losing bombers at an alarming rate. You wish to upgrade your bomber squads with more armour to help make them more robust. You convince your superiors that your planes need new armour to withstand enemy ground fire and they commission a project to perform the upgrades.

Part of the initial scoping of the project falls on the engineers to determine where to place the armour for maximum effectiveness. Their challenge is to find the optimal balance between maximising armour protection while limiting weight.

They start by assessing where the planes are receiving the most damage. With the help of ground maintenance crews, the engineers map the locations and size of the damage (bullet and shrapnel) received by the bombers being repaired in their hangers. With this data, they create heat maps of where the planes are taking the most damage and make their decision to reinforce these areas…