It is not uncommon for friends and family to call me a geek. I take it as a compliment, but quickly point out that I am fashionably dressed and don’t usually have the latest in technology. That being said, some topics really strike my fancy. Probability happens to be one. That topic is geeky. This love of stats was fanned in a book I just finished, The Drunkards Walk: How randomness rules our lives by Leonard Mlodinow (2009). He does a great job of refreshing our memories about probability and takes us on a journey uncovering how we ignore probability in our decision making and would be better leaders if we paid greater attention to it.
Because medicine is empirically based, a lot of Miodinow’s examples come from our industry. How we discuss treatment odds with patients is a particularly interesting example. The author gave a blood test as part of purchasing a life insurance policy, and was declined. He was screened for HIV and found positive. The doctor told him it was a 99.9 percent chance he was infected. Since Miodinow had none of the risk factors the CDC reported at the time of his test that his risk was 1:10,000 he would be tested as positive, and out of those who tested positive 10:1000 were false. That gave Miodinow a 1:11 chance he was infected. His doctor reported the wrong probability. As it turned out, he wasn’t infected.
The thoughts I keep running through my head are those regarding leadership and decision making. When we look at new ventures or changes in operations are we considering the real probabilities of success? Do we look for information to confirm what we want to believe, or are we considering the empirical evidence and acting rational? Once an action has been taken, are we adjusting our probabilities? Bayesian statistics creates an adjustment in the statistics once a piece of information is known. In the example of the HIV testing, knowing the author did not have any risk factors and now tested positive the probability he was infected changed. When does this happen in our worlds? Given we had a better year in 2011 than 2010, what is the probability of a good year in 2012? How much of it is random distribution versus our efforts? When does the probability change? I don’t have answers, just lots of questions. As a leader, how much influence do we really have on the outcomes? Maybe it is less about setting a direction and more about remaining ethical and authentic.