Why Smart People Make Dumb Mistakes

I have been reading a brilliant book by David Robson, a former BBC science correspondent, on why intelligent people often make foolish decisions. The book is called The Intelligence Trap: Why Smart People Do Dumb Things. David Robson argues that smart people do dumb things not just as often as ordinary people, but they are probably stupid more frequently than people with average intelligence. Why is this so? Robson argues that they are frequently over-confident and they focus on a positive outcome and don’t realistically assess the odds of their project failing.

Let me give you an example, a pilot is flying home and the weather becomes stormy and the pilot knows that flying through thunder and lightning is risky. In training, pilots are taught to alter their route and avoid storms but the pilot has flown this way before in lightning and thunder and made it through. Should the pilot continue?

If you said yes, then you’ve fallen for what Mr Robson calls the ‘outcome bias’. Past research has shown that people often judge the quality of a decision by the outcome or past outcomes, but frequently the outcome is down to luck. We choose to ignore the many risky factors that could blow our endeavour of the sky, and instead think that we’ve managed this once before so we can do it again. Let me give you another example.

In a 1988 study, two groups of participants were told about a doctor’s choice to offer a patient a heart bypass that could add years to the patient’s life, but with a small chance of death during the operation. The first group were told the patient died and the participants judged the doctor harshly. The second group were told the patient lived and they thought the doctor had behaved perfectly but the benefits and risks were exactly the same in each case. Once the operation began the doctor had no control over whether the patient lived or died – it was all down to factors outside the doctor’s control, so why do we judge the doctor’s decision differently depending on the outcome?

A lucky outcome tricks us into believing a decision was wise

The outcome bias is so deeply ingrained in our thinking patterns that the trial study participants believed the doctor should be punished for the patient’s death. But this reasoning is not logical. The participants knew there was a big chance of success and a small chance of death – it all came down to luck. Once the participants were told the patient died, they blamed the doctor and said he wasn’t competent.

We reward lucky people and punish the unlucky

It seems we humans are quick to reward people for just being lucky and we are also quick to blame people for bad outcomes even when the result was outside their control. We judge them harshly even when we understand the rationale for the decision.

 “We just have a hard time dissociating the random events that, along with the quality of the decision, jointly contribute to the outcome,” said Krishna Savani from the Nanyang Technological University in Singapore, who led the study.

The danger is that positive results or straight-out good luck leads some people to believe that they are always going to come out on top. And intelligent people, with successful lives, are more susceptible to the outcome bias. They think that they’ve gotten away with it before, so they will always get away with it.

Outcome bias is alive in workplaces

In 2008 the Harvard Business School led by Professor Francesca Gino did another experiment showing that the ‘outcome bias’ is real. Study participants learnt about a scientist who fudged his results to prove the effectiveness of a drug he was testing. Prof Gino found that the participants were less critical of the scientist if the drug turned out to be safe and effective rather than if it had dangerous side effects. But rationally, shouldn’t we judge both situations equally? Scientists developing new medications must always behave responsibly.

David Robson argues that this faulty thinking is having bad consequences in many industries. Investors are rewarded for lucky streaks even if they behave unethically because their bosses cannot disconnect their assessment of the investor from the investor’s good results.

The ‘outcome bias’ also demonstrates that bad luck can harm your professional reputation even if there is evidence that you acted correctly. Prof Savani says it’s a big problem in workplaces that people are either being praised, or being blamed, for events that were determined by chance. “This is relevant for government policy makers, for business managers – for anyone who's making a decision,” Prof Savani said.

Outcome bias causes us to ignore danger

Author David Robson says the outcome bias is most dangerous when it causes people to downplay physical risks.

Another real study did look at pilot’s assessment of flying in bad weather with poor visibility. The study found that pilots were more likely to underestimate the dangers if they had recently heard of other pilots making it through bad weather. But this doesn’t guarantee the plane will make it, it just means the other pilots were lucky.

Yet another study found that the outcome bias also has an impact when it came to people deciding whether or not to buy a house and content insurance. People who had survived natural disasters unscathed thanks to luck were more likely not to buy insurance.

David Robson argues that Nasa scientists even fell victim to the outcome bias. The crash of Nasa’s Columbia shuttle was caused by foam insulation breaking off a tank during the launch, causing debris to strike a hole in the wing of the orbiter. The foam had broken on many previous flights, however due to luck never before created enough damage to cause a crash.

Do you take too many risks?

My question to you is what risks do you take in your life because you think you will get away with it? Do you drink drive? Do you buy high-risk stocks? Do you quit jobs in the hope that another job will quickly turn up? I am all for people taking risks, but they should be measured, calculated, controlled risks. I want you to pursue your dreams, but I want you to do all your homework first to ensure your dreams will be successful.

Researchers have found people act more responsibly at work if bosses emphasise factors like safety and the potential damage to the company’s reputation. After such warnings, people were more likely to identify potential dangers. Employees are also more cautious if warned that they will have to justify their decisions to a senior manager. Workplaces should reward people for being cautious, not winging it and depending on luck.

Look at every possible outcome

When making a big decision you need to focus on the many different scenarios that could eventuate and know that you can live with every outcome – even if everything goes wrong!

To achieve success do not be blinded by outcome bias. There are no guarantees in life, you need to do everything you can, to assure success and not just rely on luck.