Narrative fallacy: Stealing the credit from Chaos

If you think looking at the above picture that this post is about A/B testing, well, it is not! But questioning the results of it did direct me to a human trait often overlooked but inherent in most of us: the need to introduce cause and effect relationship in everything that happens around us.

Let me break this down for you. A/B testing is often used in marketing & product management space to compare variations of a product by showing it to different users. Post this, based on a better user experience and conversion rate, a variant is finalized. Now, this is what I realized recently while interacting with my teammates on one such instance: If I don’t disclose the results (conversion %) and ask 10 of them to explain for any version “Why it is the optimal version?” I might end up receiving 10 different explanations. And it doesn’t end here. If I ask the same question for the other version, I might receive these same 10 reasons tweaked the other way round. Yeah! Such is the human power of storytelling or searching for logic.

Humans often work backward and force-fit their perception as the underlying reason for an outcome. Our stories about what we see say far more about us than the facts. The same happened with Naseem Taleb, author of the book Black Swan, which he describes as below:

When I was about seven, my school teacher showed us a painting of an assembly of impecunious Frenchmen in the Middle Ages at a banquet held by one of their benefactors, some benevolent king, as I recall. They were holding the soup bowls to their lips.

The schoolteacher asked me why they had their noses in the bowls and I answered, “Because they were not taught manners.” She replied, “Wrong. The reason is that they are hungry.”

I felt stupid at not having thought of this, but I could not understand what made one explanation more likely than the other, or why weren’t we both wrong.

What we are talking here is Narrative fallacy, which in Taleb’s words is ‘our limited ability to look at sequences of facts without weaving an explanation into them, or, equivalently, forcing a logical link, an arrow of relationship upon them.’

This concept struck a chord with me when, recently, I was reading Brad Stone’s narrative of Amazon’s journey in his book: The Everything Store. Here, Bezos himself warns the author of committing narrative fallacy while writing the Amazon story. He believes that a lot of decisions that the firm made or products that they launched such as Amazon Web services have no easy explanation. ‘When a company comes up with an idea, it’s a messy process. There’s no aha moment,’ Bezos said. Oversimplifying the actual events to weave them into a story might make it soothing and understandable for readers but will also shield them from the real complex story.

In fact, most of the biographies have a repetitive narrative such as the impact of childhood on the protagonist leading to their determination to prove something or emphasis on how a unique idea & a long term vision worked wonders. Take a moment and think about the biographies that you have read. Ring any bells? Similar storytelling? Don’t you think there must be at least a few other people with similar characteristics & adversaries in life, who might have gone beyond routine to accomplish their goals but didn’t succeed? Or vice versa. People who had a normal background and worked with just the right amount of determination and hard-work but achieved success? Point is we are often presented with biased narratives which convince us enough to overlook the chance events and the unnerving element of luck that often shapes one’s trajectory.

Take for example the story of Mcdonald’s. If you have watched The Founder on Netflix, you would have noticed how much the movie focuses on the significance of persistence and determination to achieve success. But what about the chance meeting of Harry Sonnenberg and Ray Kroc at the bank? It was Sonnenberg’s model of real estate lease which ultimately helped Ray revamp the whole franchise model. Had that not been the case, Mcdonald’s was in for making losses. Neglecting the extreme impact of rare and unpredictable outlier events presents an incomplete story devoid of the crucial points of inflection.

Why is it alarming?

In a generation like ours, where we are often excited to read about our favourite entrepreneur or success story of a start-up, misrepresentation of real events is alarming. One can end up having irrational or biased views just because they read “x” led to success for many people. We don’t get to read about what role luck played ever! This can result in having unreal expectations from oneself and also lead to poor decision making. We can end up living in a blurred reality filled with simple stories and fancy words such as resilience and assertiveness ( I am not at all undermining these qualities!), without harnessing the power of random events or one’s intuitions.

How to avoid it?

1. Be aware that narrative fallacy exists and be critical while writing.

2. Identify the content that is more subject to this fallacy – biographies/memoirs/sales content/people who are expert at providing this narrative. Read biographies for inspiration and entertainment. But never use it as a guidebook.

3. People might have made a decision out of gut but when asked about their story, they weave it into a fake narrative to create logic and sense. If you ever do something out of the gut, avoid fitting it in a story.

We cannot completely get rid of it for it is hard-wired in us as humans to find simplistic explanations for these events retrospectively. But it is imperative for us to be cognizant of this and give due credit to the chaos around, which ironically, often results in order.

Thank you for reading through. Leaving you thinking of the chance events that led you to where you are today.