Wednesday, March 6, 2013

Are You a Gambler?

We're all capable of falling for the "gambler's fallacy". If you interview several bad candidates for a position, and you believe that, based on their resumes, you're just as likely to get one that fits well with the organization as not, you will presume that the next candidate has got to be good.

It's like this: suppose I flip a coin several times. I get heads five times in a row. What will you bet that the next one is tails? Are you 100% confident it's going to be tails? Are you 80% confident? Are you confident that it's going to be heads again? You probably believe that I'm more likely to get a tail than a head, probably 2:1 odds.

Similarly, if you've interviewed equally qualified candidates and had 4 'stinkers' in a row, you're probably thinking that the next one has got to be a good one.

Or you convinced yourself that they're all bad.

Yet, the probably of finding one who fits into your organization might be a 50:50 proposition and therefore you're as likely to have a bad one, a good one, a bad one, a good you are to have two bad ones, two good ones or three bad ones and one good one. (A recent NPR report helped explode some interviewing myths.)

Your auditors suffer from the same gambler's fallacy too. If they have problems with four or five audits in a row, they're already positioned to believe either the really best about you or the really worst about you...and they'll look for evidence to support that position. It has nothing to do with how well your operations, policies, processes and procedures work. It's their disposition.

Remember the gambler's fallacy next time you have several strategy proposals presented to you. What you think of the first ones if they're consistently good or bad will influence how you view the last ones.

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