Prof Oyewole Sarumi
In the world of leadership and entrepreneurship, success is often glamorized, and the stories of those who make it big are celebrated in every corner of the media. Entrepreneurs and investors who took risks, gambled their fortunes, and reaped the rewards are often depicted as heroes in motivational speeches, self-help books, and corporate seminars.
Their stories serve as blueprints for aspiring leaders to follow. However, beneath the surface of these success stories lies a crucial but often overlooked element—survivorship bias.
Survivorship bias, a psychological phenomenon, occurs when we focus only on the successful individuals or companies and ignore those who failed. It distorts our perception of success, making it appear as though it is a guaranteed result of taking risks or working hard.
In reality, success is far more complex, and learning from failure is just as important, if not more so, than studying success. This article explores the concept of survivorship bias, its impact on leadership, and why we must reconsider how we approach success and failure in order to make more informed, strategic decisions.
The Illusion of Success
One of the most pervasive myths in the business world is that success is primarily a product of hard work and risk-taking. This narrative is propagated by successful entrepreneurs, investors, and industry leaders who share their stories of triumph, often highlighting the risks they took to reach the top. Their words inspire many to take similar leaps of faith, believing that the same path will lead to their own success.
However, the truth is that for every successful entrepreneur who took a significant risk, there are countless others who took the same risks and failed. These individuals don’t receive the same attention or recognition. They don’t get to share their stories in front of audiences, write bestsellers, or have their names associated with groundbreaking innovations. The reason for their silence is not because they lacked skill, determination, or ambition, but because they were part of the larger group that didn’t make it.
What Is Survivorship Bias?
Survivorship bias is the cognitive bias that arises when we focus only on the successful survivors in a given population and ignore those who failed. By doing so, we mistakenly attribute the success of the survivors to specific traits or actions, such as risk-taking or innovative thinking, while overlooking the factors that may have contributed to the failure of others.
For example, consider the startup ecosystem. It’s well-known that the majority of startups fail—estimates suggest that around 90% of startups will not survive their first few years. Yet, the small fraction of startups that succeed often receive the lion’s share of attention and praise. Media outlets, investors, and entrepreneurs highlight these success stories, creating an illusion that any entrepreneur with the right mindset, a great idea, and a willingness to take risks can achieve similar success. In reality, many failed startups had the same characteristics but were derailed by factors beyond their control, such as market conditions, poor timing, or lack of resources.
This bias is not limited to startups. It can be found in almost every aspect of leadership and decision-making. For instance, we see it in sports, where the successful athletes—those who win championships or break records—are celebrated, while the athletes who fell short are forgotten, even though they may have trained just as hard and faced similar challenges.
The Dangers of Survivorship Bias for Leaders
Survivorship bias has significant implications for leadership, particularly when it comes to decision-making. When leaders focus too heavily on the success stories and fail to consider the broader picture, they are at risk of making poor decisions that are based on an incomplete understanding of reality. Here are some of the dangers:
- Overconfidence in Risk-Taking
The glorification of risk-taking, as seen in the stories of successful entrepreneurs, can lead to an overestimation of the rewards that come with taking significant risks. While risk is an inherent part of business and leadership, it is not the only factor that contributes to success. By focusing only on those who have succeeded after taking big risks, leaders may overlook the importance of other elements such as market research, strategic planning, and timing. This can lead to overly risky decisions that are not backed by a clear understanding of the potential downsides. - Ignoring the Role of Luck
Survivorship bias also distorts our understanding of the role that luck plays in success. While skill and hard work are undeniably important, luck can play a significant role in determining the outcome of any venture. The right timing, a random connection, or even a fortunate turn of events can make all the difference between success and failure. By focusing only on those who succeeded, leaders may fail to acknowledge the element of luck and its unpredictable nature, which could lead to misguided expectations for future projects. - Missed Learning Opportunities
Perhaps the greatest risk posed by survivorship bias is the missed opportunity to learn from failure. Failure is an essential part of the learning process, yet it is often sidelined in favor of success stories. By ignoring the lessons that can be learned from those who did not make it, leaders miss out on valuable insights into what went wrong. Understanding the factors that contributed to failure—whether they be poor market fit, insufficient funding, or ineffective leadership—can provide critical knowledge that helps prevent similar mistakes in the future. - Distorted Expectations for Aspiring Leaders
For aspiring leaders, survivorship bias creates unrealistic expectations. They are often exposed to a one-sided narrative that celebrates success without acknowledging the challenges and setbacks that many successful individuals faced along the way. This can lead to feelings of inadequacy and frustration when things don’t go as planned, as they may not fully appreciate the complexity of success. When the failure stories are hidden or ignored, it becomes harder for emerging leaders to build resilience and prepare for the inevitable obstacles they will encounter.
Understanding Failure: A Valuable Teacher
Failure is not the antithesis of success; it is an integral part of the journey toward it. In fact, some of the greatest lessons in leadership come from analyzing what went wrong and using those insights to improve. It’s essential for leaders to take a more holistic view of success by acknowledging the failures that have led to the success stories we hear today.
Research has shown that individuals who are able to learn from failure are more likely to succeed in the long term. A study by the Harvard Business Review found that “people who acknowledge their failures and learn from them are better equipped to handle challenges and setbacks in the future.” This ability to learn from failure is especially important in leadership roles, where the ability to adapt, pivot, and reassess strategies can make the difference between success and stagnation.
Leaders who embrace failure as a learning opportunity rather than a setback are better positioned to build more resilient and sustainable organizations. They understand that risk-taking and innovation are important, but so too is the capacity to learn from mistakes, adjust, and move forward.
The Role of Resilience in Leadership
Resilience is one of the most important qualities a leader can possess. It is the ability to bounce back from setbacks, learn from them, and continue moving forward with greater wisdom. By acknowledging the lessons in failure, leaders can develop a mindset that allows them to weather the storms of business and leadership. Resilience also enables leaders to foster a culture of growth within their organizations, where failure is not stigmatized but used as a stepping stone to improvement.
One example of a resilient leader is Howard Schultz, the former CEO of Starbucks, who turned the company into one of the most recognized brands in the world. Schultz faced numerous failures before achieving success, including the failure of his first business venture and skepticism from investors when he tried to expand Starbucks internationally. Yet, he continued to learn from his setbacks and used those lessons to build a stronger, more successful company. His story is one of perseverance, adaptation, and the ability to find opportunity in failure.
Reframing Success and Failure
Survivorship bias is a silent force that distorts our understanding of success and failure. By focusing only on those who made it, we risk overlooking the complexities of leadership and the crucial lessons that can be learned from failure. To make more informed decisions, leaders must take a broader view of success that includes the stories of those who did not make it, as well as the lessons they can offer.
Ultimately, leadership is not about blindly taking risks or simply striving for success. It’s about understanding the full spectrum of what it takes to lead—embracing both success and failure as integral parts of the journey. By learning from failure, leaders can build more resilient, adaptable organizations and become better equipped to navigate the ever-changing landscape of business and leadership.
