study failure as you do success

1671172-inline-inline-wwii-facebook-designYou 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?

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Comments

  1. Love the Wald story. I think the case study method of teaching capitalizes on just what you’re suggesting–learning from failure as much as success. When the ‘Internet era’ began, few knew how to succeed. At first, many thought “eyeballs” were the only necessary ingredient. The massive dot-com bust exposed the silliness of this premise. Because of the many Internet failures of the 90s, I think today’s online entrepreneurs have a much better grasp of what it takes to succeed.
    Kurt @ Money Counselor recently posted…Taxhelp.orgMy Profile

    • I completely agree with your Kurt. And I do love the Wald story. I even read his work regarding armoring the planes. A little out of my league, if I’m being quite honest. But there isn’t a bevy of information available online regarding it, much to my surprise.

  2. Hey, I’ve never thought of it that way but studying failure is a great idea. After all, it usually takes many failures before you reach success. Might as well learn something from it.
    Holly@ClubThrifty recently posted…Cheap-Ass Beauty TipsMy Profile

  3. Love the story about Wald. Makes complete sense, and hey, the plane won’t make it back if the pilot gets hit by a stray bullet!

    I’ve made some pretty epic financial failures in the past, but I’m now trying to rectify them by learning from them. The past year has done wonders for my net worth because I’m not making the same mistakes.
    Mr Ikonz @ Project Ikonz recently posted…I’m now debt free! (and have no car)My Profile

    • That’s awesome to hear man! I’ve definitely made some financial boners myself. Some serious ones, but they aren’t mistakes I’m going to make again. I think a lot of people remain in the debt-cycle of “buy on credit, pay down, repeat” because they fail to learn from their mistakes, or learn from the mistakes of others.

  4. You make an excellent point. If you don’t fail from time to time, you can’t appreciate the successes! :)
    Cat Alford (@BudgetBlonde) recently posted…We Love Our Frugal RenovationMy Profile

  5. Agree with this post! I think if we only look up to successful people we will feel bad about ourselves for not achieving things they do, but if we learn about others’ failures we will learn what not to do which helps us have a better grasp on how to do better without comparing ourselves to others.
    Poor Student recently posted…5 Things You Shouldn’t Do with Money in CollegeMy Profile

  6. Even studying my own failures has taught me more than my successes. That’s one of the reasons I blog. I like to pass on what I went through in order to maybe save someone else from making the same mistake.
    Tonya@Budget and the Beach recently posted…Hello DebtMy Profile

  7. I have never really studied failure, per say, but I have definitely learned from other people’s mistakes. I think that’s helpful, too.
    SuburbanFinance recently posted…The Financial Side of the OlympicsMy Profile

  8. I think that’s a great idea. We can definitely learn a thing or two in failure.
    Grace Cinotti recently posted…More..My Profile

  9. Thanks for sharing Wald’s story, I hadn’t heard of him before. What a great example of how studying failure can help us out. And not just the stories of failure from those who have gone on to succeed. There is such value in studying those who have tried something before you and were not successful. Great reminder!
    Kay recently posted…What Are Investment Fees Really Costing You?My Profile

  10. I definitely think studying other people’s failures is important. We can learn by our own trial and error, but why do that when you can learn from other people’s trial and error?
    DC @ Young Adult Money recently posted…The Weekly Quick Hits RoundupMy Profile

  11. Great post, Ryan. I’m happy to have my failures to learn from. They’re part of what has shaped me. My parents also haven’t been the smartest with money, but my father has often told me to learn from his mistakes. I worry about their retirement, but know that my sister and I would help them if we needed to.
    Addison @ Cashville Skyline recently posted…The Tiny House Movement: Where Do You Fit In?My Profile

  12. Lessons learned, L2s, post-mortems, different sides of the same coin. As long as emotions are kept in check, failures are fantastic opportunities to learn and modify future behavior. In some professional settings, where failures are sometimes punished rather than seen as what they should be, not unusual to have them swept under the rug.
    101 Centavos recently posted…Kelly Blue Book, Autotrader and Cox: They’re Not Your FriendsMy Profile

  13. What an awesome post! It’s so true that we always highlight all the things that people do right. We should take stock of how people failed so that we can benefit from their experience.
    My husband and I know of some couples who make good money and spend it just as quickly as they make it. Instead of keeping up with the Joneses (so to speak), we learn from the errors of their ways and keep living our frugal lifestyle.
    Anneli @thefrugalweds recently posted…Personal Finance Advice for my 20-year old SelfMy Profile

  14. Agree on the credit cycle!! It’s really held me back over the last few years.
    The positive side of making financial mistakes in the past means I know what not to do and importantly, I hold myself to a crazy-high standard now.

    My net worth went up $22k last month and I still feel like I’m not doing enough to retire early! Maybe I’m just crazy…
    Projectikonz recently posted…February 2014 net worth updateMy Profile

    • I know, I do the same thing. My wife is always reminding me of how well we’ve done,when I’m annoyed or feeling like it isn’t enough. And $22k in a month is seriously awesome, so you’re obviously doing something right man~

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  1. […] person, and if you’re not, check her out on Twitter.  And Facebook.  I also wrote about how studying failure can help you succeed, highlighted by Abraham Wald.  His work during WW2 is seriously […]

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