The Role of Luck in Life Success Is Far Greater Than We Realized - Scientific American Blog Network


32 bookmarks. First posted by flobosg march 2018.


What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success , Forbes , Inc. , and…
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march 2018 by dkiesow
"What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success, Forbes, Inc., and Entrepreneur, there is no shortage of interest in these questions. There is a deep underlying assumption, however, that we can learn from them because it's their personal characteristics--such as talent, skill, mental toughness, hard work, tenacity, optimism, growth mindset, and emotional intelligence-- that got them where they are today. This assumption doesn't only underlie success magazines, but also how we distribute resources in society, from work opportunities to fame to government grants to public policy decisions. We tend to give out resources to those who have a past history of success, and tend to ignore those who have been unsuccessful, assuming that the most successful are also the most competent.

But is this assumption correct? I have spent my entire career studying the psychological characteristics that predict achievement and creativity. While I have found that a certain number of traits-- including passion, perseverance, imagination, intellectual curiosity, and openness to experience-- do significantly explain differences in success, I am often intrigued by just how much of the variance is often left unexplained.

In recent years, a number of studies and books--including those by risk analyst Nassim Taleb, investment strategist Michael Mauboussin, and economist Richard Frank-- have suggested that luck and opportunity may play a far greater role than we ever realized, across a number of fields, including financial trading, business, sports, art, music, literature, and science. Their argument is not that luck is everything; of course talent matters. Instead, the data suggests that we miss out on a really importance piece of the success picture if we only focus on personal characteristics in attempting to understand the determinants of success.

Consider some recent findings:

• About half of the differences in income across people worldwide is explained by their country of residence and by the income distribution within that country,
• Scientific impact is randomly distributed, with high productivity alone having a limited effect on the likelihood of high-impact work in a scientific career,
The chance of becoming a CEO is influenced by your name or month of birth,
• The number of CEOs born in June and July is much smaller than the number of CEOs born in other months,
• Those with last names earlier in the alphabet are more likely to receive tenure at top departments,
• The display of middle initials increases positive evaluations of people's intellectual capacities and achievements,
• People with easy to pronounce names are judged more positively than those with difficult-to-pronounce names,
• Females with masculine sounding names are more successful in legal careers.

The importance of the hidden dimension of luck raises an intriguing question: Are the most successful people mostly just the luckiest people in our society? If this were even a little bit true, then this would have some significant implications for how we distribute limited resources, and for the potential for the rich and successful to actually benefit society (versus benefiting themselves by getting even more rich and successful).

In an attempt to shed light on this heavy issue, the Italian physicists Alessandro Pluchino and Andrea Raspisarda teamed up with the Italian economist Alessio Biondo to make the first ever attempt to quantify the role of luck and talent in successful careers. In their prior work, they warned against a "naive meritocracy", in which people actually fail to give honors and rewards to the most competent people because of their underestimation of the role of randomness among the determinants of success. To formally capture this phenomenon, they proposed a "toy mathematical model" that simulated the evolution of careers of a collective population over a worklife of 40 years (from age 20-60).

The Italian researchers stuck a large number of hypothetical individuals ("agents") with different degrees of "talent" into a square world and let their lives unfold over the course of their entire worklife. They defined talent as whatever set of personal characteristics allow a person to exploit lucky opportunities (I've argued elsewhere that this is a reasonable definition of talent). Talent can include traits such as intelligence, skill, motivation, determination, creative thinking, emotional intelligence, etc. The key is that more talented people are going to be more likely to get the most 'bang for their buck' out of a given opportunity (see here for support of this assumption).

All agents began the simulation with the same level of success (10 "units"). Every 6 months, individuals were exposed to a certain number of lucky events (in green) and a certain amount of unlucky events (in red). Whenever a person encountered an unlucky event, their success was reduced in half, and whenever a person encountered a lucky event, their success doubled proportional to their talent (to reflect the real-world interaction between talent and opportunity).

What did they find? Well, first they replicated the well known "Pareto Principle", which predicts that a small number of people will end up achieving the success of most of the population (Richard Koch refers to it as the "80/20 principle"). In the final outcome of the 40-year simulation, while talent was normally distributed, success was not. The 20 most successful individuals held 44% of the total amount of success, while almost half of the population remained under 10 units of success (which was the initial starting condition). This is consistent with real-world data, although there is some suggestion that in the real world, wealth success is even more unevenly distributed, with just eight men owning the same wealth as the poorest half of the world.

[graphs]

Although such an unequal distribution may seem unfair, it might be justifiable if it turned out that the most successful people were indeed the most talented/competent. So what did the simulation find? On the one hand, talent wasn't irrelevant to success. In general, those with greater talent had a higher probability of increasing their success by exploiting the possibilities offered by luck. Also, the most successful agents were mostly at least average in talent. So talent mattered.

However, talent was definitely not sufficient because the most talented individuals were rarely the most successful. In general, mediocre-but-lucky people were much more successful than more-talented-but-unlucky individuals. The most successful agents tended to be those who were only slightly above average in talent but with a lot of luck in their lives.

Consider the evolution of success for the most successful person and the least successful person in one of their simulations:

[graphs]

As you can see, the highly successful person in green had a series of very lucky events in their life, whereas the least successful person in red (who was even more talented than the other person) had an unbearable number of unlucky events in their life. As the authors note, "even a great talent becomes useless against the fury of misfortune."

Talent loss is obviously unfortunate, to both the individual and to society. So what can be done so that those most capable of capitalizing on their opportunities are given the opportunities they most need to thrive? Let's turn to that next."



"This last finding is intriguing because it is consistent with other research suggesting that in complex social and economic contexts where chance is likely to play a role, strategies that incorporate randomness can perform better than strategies based on the "naively meritocratic" approach."



"Conclusion

The results of this elucidating simulation, which dovetail with a growing number of studies based on real-world data, strongly suggest that luck and opportunity play an underappreciated role in determining the final level of individual success. As the researchers point out, since rewards and resources are usually given to those who are already highly rewarded, this often causes a lack of opportunities for those who are most talented (i.e., have the greatest potential to actually benefit from the resources), and it doesn't take into account the important role of luck, which can emerge spontaneously throughout the creative process. The researchers argue that the following factors are all important in giving people more chances of success: a stimulating environment rich in opportunities, a good education, intensive training, and an efficient strategy for the distribution of funds and resources. They argue that at the macro-level of analysis, any policy that can influence these factors will result in greater collective progress and innovation for society (not to mention immense self-actualization of any particular individual)."
luck  meritocracy  2018  success  research  scottbarrykaufman  inequality  diversity  talent  serendipity  chance  society  misfortune  gender  race  via:robertogreco 
march 2018 by Librarysue
What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success , Forbes , Inc. , and…
march 2018 by slee2004
What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success, Forbes, Inc., and Entrepreneur, there is no shortage of interest in these questions.
ifttt  twitter 
march 2018 by marshallk
What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success , Forbes , Inc. , and…
from instapaper
march 2018 by kohlmannj
"What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success, Forbes, Inc., and Entrepreneur, there is no shortage of interest in these questions. There is a deep underlying assumption, however, that we can learn from them because it's their personal characteristics--such as talent, skill, mental toughness, hard work, tenacity, optimism, growth mindset, and emotional intelligence-- that got them where they are today. This assumption doesn't only underlie success magazines, but also how we distribute resources in society, from work opportunities to fame to government grants to public policy decisions. We tend to give out resources to those who have a past history of success, and tend to ignore those who have been unsuccessful, assuming that the most successful are also the most competent.

But is this assumption correct? I have spent my entire career studying the psychological characteristics that predict achievement and creativity. While I have found that a certain number of traits-- including passion, perseverance, imagination, intellectual curiosity, and openness to experience-- do significantly explain differences in success, I am often intrigued by just how much of the variance is often left unexplained.

In recent years, a number of studies and books--including those by risk analyst Nassim Taleb, investment strategist Michael Mauboussin, and economist Richard Frank-- have suggested that luck and opportunity may play a far greater role than we ever realized, across a number of fields, including financial trading, business, sports, art, music, literature, and science. Their argument is not that luck is everything; of course talent matters. Instead, the data suggests that we miss out on a really importance piece of the success picture if we only focus on personal characteristics in attempting to understand the determinants of success.

Consider some recent findings:

• About half of the differences in income across people worldwide is explained by their country of residence and by the income distribution within that country,
• Scientific impact is randomly distributed, with high productivity alone having a limited effect on the likelihood of high-impact work in a scientific career,
The chance of becoming a CEO is influenced by your name or month of birth,
• The number of CEOs born in June and July is much smaller than the number of CEOs born in other months,
• Those with last names earlier in the alphabet are more likely to receive tenure at top departments,
• The display of middle initials increases positive evaluations of people's intellectual capacities and achievements,
• People with easy to pronounce names are judged more positively than those with difficult-to-pronounce names,
• Females with masculine sounding names are more successful in legal careers.

The importance of the hidden dimension of luck raises an intriguing question: Are the most successful people mostly just the luckiest people in our society? If this were even a little bit true, then this would have some significant implications for how we distribute limited resources, and for the potential for the rich and successful to actually benefit society (versus benefiting themselves by getting even more rich and successful).

In an attempt to shed light on this heavy issue, the Italian physicists Alessandro Pluchino and Andrea Raspisarda teamed up with the Italian economist Alessio Biondo to make the first ever attempt to quantify the role of luck and talent in successful careers. In their prior work, they warned against a "naive meritocracy", in which people actually fail to give honors and rewards to the most competent people because of their underestimation of the role of randomness among the determinants of success. To formally capture this phenomenon, they proposed a "toy mathematical model" that simulated the evolution of careers of a collective population over a worklife of 40 years (from age 20-60).

The Italian researchers stuck a large number of hypothetical individuals ("agents") with different degrees of "talent" into a square world and let their lives unfold over the course of their entire worklife. They defined talent as whatever set of personal characteristics allow a person to exploit lucky opportunities (I've argued elsewhere that this is a reasonable definition of talent). Talent can include traits such as intelligence, skill, motivation, determination, creative thinking, emotional intelligence, etc. The key is that more talented people are going to be more likely to get the most 'bang for their buck' out of a given opportunity (see here for support of this assumption).

All agents began the simulation with the same level of success (10 "units"). Every 6 months, individuals were exposed to a certain number of lucky events (in green) and a certain amount of unlucky events (in red). Whenever a person encountered an unlucky event, their success was reduced in half, and whenever a person encountered a lucky event, their success doubled proportional to their talent (to reflect the real-world interaction between talent and opportunity).

What did they find? Well, first they replicated the well known "Pareto Principle", which predicts that a small number of people will end up achieving the success of most of the population (Richard Koch refers to it as the "80/20 principle"). In the final outcome of the 40-year simulation, while talent was normally distributed, success was not. The 20 most successful individuals held 44% of the total amount of success, while almost half of the population remained under 10 units of success (which was the initial starting condition). This is consistent with real-world data, although there is some suggestion that in the real world, wealth success is even more unevenly distributed, with just eight men owning the same wealth as the poorest half of the world.

[graphs]

Although such an unequal distribution may seem unfair, it might be justifiable if it turned out that the most successful people were indeed the most talented/competent. So what did the simulation find? On the one hand, talent wasn't irrelevant to success. In general, those with greater talent had a higher probability of increasing their success by exploiting the possibilities offered by luck. Also, the most successful agents were mostly at least average in talent. So talent mattered.

However, talent was definitely not sufficient because the most talented individuals were rarely the most successful. In general, mediocre-but-lucky people were much more successful than more-talented-but-unlucky individuals. The most successful agents tended to be those who were only slightly above average in talent but with a lot of luck in their lives.

Consider the evolution of success for the most successful person and the least successful person in one of their simulations:

[graphs]

As you can see, the highly successful person in green had a series of very lucky events in their life, whereas the least successful person in red (who was even more talented than the other person) had an unbearable number of unlucky events in their life. As the authors note, "even a great talent becomes useless against the fury of misfortune."

Talent loss is obviously unfortunate, to both the individual and to society. So what can be done so that those most capable of capitalizing on their opportunities are given the opportunities they most need to thrive? Let's turn to that next."



"This last finding is intriguing because it is consistent with other research suggesting that in complex social and economic contexts where chance is likely to play a role, strategies that incorporate randomness can perform better than strategies based on the "naively meritocratic" approach."



"Conclusion

The results of this elucidating simulation, which dovetail with a growing number of studies based on real-world data, strongly suggest that luck and opportunity play an underappreciated role in determining the final level of individual success. As the researchers point out, since rewards and resources are usually given to those who are already highly rewarded, this often causes a lack of opportunities for those who are most talented (i.e., have the greatest potential to actually benefit from the resources), and it doesn't take into account the important role of luck, which can emerge spontaneously throughout the creative process. The researchers argue that the following factors are all important in giving people more chances of success: a stimulating environment rich in opportunities, a good education, intensive training, and an efficient strategy for the distribution of funds and resources. They argue that at the macro-level of analysis, any policy that can influence these factors will result in greater collective progress and innovation for society (not to mention immense self-actualization of any particular individual)."
luck  meritocracy  2018  success  research  scottbarrykaufman  inequality  diversity  talent  serendipity  chance  society  misfortune  gender  race 
march 2018 by robertogreco
It’s human nature to want to associate your successes with skill and active choice (and often our misses with *bad luck*), but data suggests that luck, or random chance, may have more to do with success.

> The researchers argue that the following factors are all important in giving people more chances of success: a stimulating environment rich in opportunities, a good education, intensive training, and an efficient strategy for the distribution of funds and resources.

This made me thing of [Fooled by Randomness](https://en.wikipedia.org/wiki/Fooled_by_Randomness) as I read it. I highly recommend that book. It forever changed how I look at track records.
march 2018 by thingles
The Role of Luck in Life Success Is Far Greater Than We Realized:What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success, Forbes, Inc., and Entrepreneur, there is no shortage of interest in these questions. via Pocket at March 04, 2018 at 04:24AM
Pocket 
march 2018 by Daman
What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success , Forbes , Inc. , and…
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march 2018 by cspathis
Are the most successful people in society just the luckiest people?
luck  sciam  life  success 
march 2018 by jorgebarba
The Role of Luck in Life Success Is Far Greater Than We Realized
Fascinating read ... and i…
from twitter
march 2018 by jameskeim
"However, talent was definitely not sufficient because the most talented individuals were rarely the most successful. In general, mediocre-but-lucky people were much more successful than more-talented-but-unlucky individuals. The most successful agents tended to be those who were only slightly above average in talent but with a lot of luck in their lives."
luck  success  life  scientificamerican  2018 
march 2018 by handcoding
This is really fascinating and well worth a read.
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march 2018 by toph
What does it take to succeed? What are the secrets of the most successful people? Judging by the popularity of magazines such as Success , Forbes , Inc. , and…
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march 2018 by flobosg