I’ve been reading (ok, listening to) The Black Swan: The Impact of the Highly Improbable
One great insight came from a story Taleb tells about Fat Tony and Doctor John.
Doctor John has a PhD in electrical engineering from the University of Texas at Austin. Since he knows both computers and statistics, he was hired by an insurance company to do computer simulations; he enjoys the business. Much of what he does consists of running computer programs for “risk management.”
“Fat Tony” has this remarkable habit of trying to make a buck effortlessly, just for entertainment, without straining, without office work, without meeting, just by melding his deals into his private life. Tony’s motto is “Finding who the sucker is.”
Taleb: Assume that a coin is fair, i.e., has an equal probability of coming up heads or tails when flipped. I flip it ninety-nine times and get heads each time. What are the odds of my getting tails on my next throw?
Dr. John: Trivial question. One half, of course, since you are assuming 50 percent odds for each and independence between draws.
Taleb: What do you say, Tony?
Fat Tony: I’d say no more than 1 percent, of course.
Taleb: Why so? I gave you the initial assumption of a fair coin, meaning that it was 50 percent either way.
Fat Tony: You are either full of crap or a pure sucker to buy that “50 percent” business. The coin gotta be loaded. It can’t be a fair game.
As leaders of IT professionals we deal with a lot of Dr Johns. They have been trained in logic and statistics in university and know how to calculate odds. They “know” that a fair coin has a 50% chance of falling on heads and an equal chance of falling on tails. They “know” that a coin can come up heads 99 times in a row. It’s unlikely, but it’s possible. They “know” that every toss of a coin is totally independent of the previous. They “know” that the 100th toss of a coin has a 50/50 chance of coming up tails.
But knowledge, as they say, can be a dangerous thing.
Occam’s Razor (entia non sunt multiplicanda praeter necessitatem) is often summed up along the lines of “The simplest answer is often the best”. Dr John’s brain has been trained to think too much. He’s forgotten to find the simplest answer. Fat Tony, on the other hand, has found the most obvious answer which, according to Occam, is the best answer.
How many times has someone on your team found the most logical solution, only to discover down the track that it wasn’t the right answer. And that the right answer was staring everyone in the face.
But wait. Many of us are from similar backgrounds. Many of us are Dr John.
Thought for the day: learn to recognise when you’re being Dr John and try to be Fat Tony.
