You can learn a great deal by studying others- everyone knows to look at those who have succeeded. That’s nothing new; we’re all students of success. But, you should also be a student of the not so successful. The so-called “failures.” Study failure as you do success.
Take a look at the picture to the right. Say the Army calls you in to determine where to add additional armor to their planes. They show you this picture. The plane on the left is an undamaged plane. On the right, the shaded areas represent the locations of bullet holes and damage on aircraft returning to base from flying above enemy territory. You obviously can’t add armor to the entire plane, as that would make it too heavy to fly. Now… where would you put the armor?
Raise your hand if you’ve ever heard of Abraham Wald? Don’t be ashamed if you haven’t (I didn’t hear about him until a class I took on technology and the law, of all things). Wald, a mathematician alive during the first half of the 20th Century, was called on to answer just this question during WW2. The military commanders recommended armoring the planes where they took the most damage. The shaded parts of the plane on the right. It makes sense, unless you think about it… and realize it doesn’t.
You want to put the armor where the planes aren’t showing any damage. If the planes are returning from enemy territory with bullet holes all throughout the wings, tail and part of the body, what does that tell you? That they’re strong there! They don’t need any extra armor in those areas. Those are the areas the planes could be shot and still remain airworthy for the return home. Wald knew to look for that; for what wasn’t there. He studied not only the success of the planes returning home, but he studied the failure of those that did not. He suggested putting the armor on the locations that didn’t show damage. Those were the areas that were hit that resulted in the loss of planes, and more importantly, the loss of people. He was aware of so-called survivorship bias, and properly accounted for it. Survivorship bias is present not just in war, but business, finance, and many other aspects of today’s society. Its the “logical error of concentrating on the people or things that ‘survived’ some process and inadvertently overlooking those that did not because of their lack of visibility.” Say you’re planning on opening a department store. You would want to look not only at what Macy’s and Nordstrom did right, you would also want to look at what Sears and JC Penney did wrong (although I guess technically Sears and JCP are still alive.). Okay, cool story bro, but how does this help me get wealthy?
There are plenty of successful individuals out there from whom we can learn. How to retire early, save more, earn more, spend less, and live smarter lives. Unfortunately, there are also a great many from which we can learn what not to do. It can be as easy as an honest, genuine question to those willing to share; “what would you do differently?” Admittedly, my parents are not great with money, and I worry about their future now that they’re nearing the traditional retirement age. To my great benefit, they are willing to answer this question. They might not be able to tell me what I should be doing to obtain wealth, but they can most definitely advise me on what they did wrong. I have a feeling a lot of people would be willing to share their trials and tribulations, both their successes and failures. And you can learn from the failures just as you can the successes. After all, if you’re only looking at what people did right, you won’t be able to see what they did wrong.
Whenever you’re studying success, remember Abraham Wald saved countless lives by being a student of failure.
How has studying a failure helped you achieve success?