Do you believe that old buildings are more beautiful and better built?

Do you think that machines manufactured by previous generations are better built and last longer?

We walk in life seeing things and drawing conclusions from that, because ‘seeing is believing’.

About half a year ago, I red a story in a book that stuck with me. But the lesson extracted from it was rather inconsistent in the book. I liked the story, but I struggled with its application into day to day life and into business.

One recent night, I found myself thinking about the story and then I realised that I should do my next Linkedin article about it. So I researched the story further, and I believe I found its true meaning.

The story is this:

Let’s go back to 1943, Manhattan, New York. The Statistical Research Group is working in an apartment building, 2 blocks away from Columbia University. Destiny had brought Abraham Wald to be in this secret US program where mathematicians were fighting the second world war with statistics. Wald was an eminence among this group. An interesting fact is that because he was Romanian, he was technically not allowed to read the reports he was producing.

The group was providing recommendations to the military, such as how to load a machine gun by mixing 5 types of ammunition and drafting sampling inspection plans for rocket fuel.

That year, the Air Force requested advice regarding the armour in their bombers. They had catalogued the bullet damage received by the planes. They realised that this information could help them optimise the armour, by shifting the armour onto the places that receive most of the damage. But how much to move, could they even make the bombers lighter to gain speed and operational range?

A representative diagram of accumulated bullet damage looked like this:

The military was expecting to reinforce the most damaged areas, but Wald's advice was to reinforce the areas where they hadn’t seen much damage, because the missing bullet holes were in the bombers that did not make it back. These areas were the engines and the fuel system.

This type of situation is counter-intuitive and is called Survivorship Bias.

The bias can occur every time there is a selection process. Sometimes, we overlook people or things that did not survive, and in some occasions we don’t even realise that there has been a selection process before.

Let’s go back to the old machines that ‘They don’t make them like the used to’. Because of the selective pressures of usage and time, it is evident that only those that were built with supreme quality have survived to this day. All the machinery of lower quality that failed is not visible to us anymore as they have been scrapped or recycled. Machines built more recently of low quality are visible to us, but not the low quality ones from the past. Because of this, we fall into the survivorship bias.

A similar analysis can be done with buildings. Architecture constantly goes through renewal, renovation and evolution. Only the most beautiful, useful and strong buildings survive. The ugliest and weakest have been knocked down, but since we can see plenty of modern ugly and low quality building, we erroneously generalise that old buildings are more beautiful and were better built.

Going back to the bomber planes…

This story has 2 lessons. One is that ignoring what we don’t see can result in a flawed interpretation of results. But the most important is the second one, reinforcing where we don’t see a problem. This is what I like the most… the idea of reinforcing where no damage has been seen; not because it is amusing that the conclusion is not obvious, but because of its potential to improve results.

In business I see a deep interest in hugely successful companies and its founders. Then, much is done to promote formulas for success based on their experiences. This is paying attention to the holes in the bombers that survived. But, we should also look for the problems we don’t see that were fatal to the companies that did not make it, and then we should reinforce those areas. I suspect that the knowledge of how to prevent and solve those hidden problems will increase the survival rates of entrepreneurs, and could prove more effective than feeding them formulas of past successes.





…the data that we don’t see can be the most important to success.





Further readings:

Reprint of Abraham Ward original paper: http://www4.ncsu.edu/~swu6/documents/A_Reprint_Plane_Vulnerability.pdf











