3 Ideas in 2 Minutes on the Benefit of Hindsight
Hindsight Bias, Suffering Twice & Premortem Analysis
I. Hindsight Bias
Hindsight Bias is a cognitive phenomenon that leads us to be bullish on our ability to have predicted the future — after the fact. With the proverbial benefit of hindsight, we tend to think we knew it all along. How the movie would end, who would lose the final, or who would win the election.
A Black Swan event such as the 2008 financial crisis is an extreme example. By its very definition, a Black Swan is an exceptionally rare and highly improbable occurrence. When it does happen, its impact is severe. In retrospect, everyone insists it was obvious.
II. Suffering Twice
Given the inevitability of failure, ancient Greek writer Sophocles had a defiant relationship with regret:
I have no desire to suffer twice, in reality and then in retrospect.
—Sophocles
III. Premortem Analysis
If you don’t want to suffer twice either, there are ways to anticipate failure and avert regret. A Premortem Analysis is a structured analytic technique designed to identify mistakes before they’re made. It’s closely related to a post-mortem, the medical examination of a body to determine the cause of death.
A Premortem is best used in a group, shortly before a decision is implemented or a project is finalised. It hinges on a crucial reframing of the situation at hand:
Imagine yourselves a few weeks or months in the future. Our decision has turned out to be spectacularly mistaken, our project has failed. What went wrong?
The group then spends time brainstorming potential sources of failure. After collating and discussing the results, they decide what actions to take.
You probably saw this coming: I’ve recently published a new in-depth essay on Premortem Analysis: How to Anticipate Failure. 🐘
Have a great week,
Chris
themindcollection.com
