World Cup Soccer, Brains, Business, Life and Statistical Thinking

I love the game of soccer – me and a couple of billion others.  Every four years, we soccer lovers go into a state of vampire like madness – some of us staying up late hours of the night to watch the games, dream, fantasize and scream for joy at visions fulfilled and scream and cry in anguish at dreams trodden in the mud.

Nothing unique in this by the way: I see the same expressions in baseball, tennis, women’s bowling, pie-eating contests – except perhaps at a less global level.

We are human beings with wired brains no matter what sport we play.. or what we do. Whether we are screaming at 22 players on a field kicking around a rubber ball or operating in business or in life, the stark commonalities lie in how our brains operate.

As I sit here in the local Santa Cruz pub watching the game, I cannot help but make the following observations of myself, the fans and of the teams.

  1. Opinions may not matter

No matter what we think or say, the results seem to be independent of what our opinions are.  We know this logically but our conversations tell us otherwise – people talk and act as if what they say about the players will actually affect the outcome.

In business, we see and hear this all the time; my clients will present opinions about how sales could go which of course, we know matters not in the final analysis.

  1. Reasons or Causes may not matter

So what does really matter?  Should we stop looking for reasons to help analyze?  Of course not – but maybe we should stop being so married to reasons, causes and opinions – after all should we really care about the reason? Who cares why a business fails after it fails? Could we learn something from the reason? Well maybe.

  1. Maybe Life is Statistical

This is a fundamental law: Nobody can predict anything all the time accurately.  Life and business is inherently unpredictable.  I can see some of you nodding and saying “Thank you for sharing Sunil.. and so what? That is obvious isn’t it?”

But the conflict is in how we actually behave – most of us (myself included) are not equipped to think statistically (reference Nobel Prize winner Daniel Kahneman in his book “Thinking Fast and Slow”).

We find it difficult to view and think of life as being statistical: a simple expression of this is the following:

  • Under certain conditions (e.g. small sample sizes or small populations), you will have extreme results.  E.g. in the World Cup, with the small number of top soccer teams, any team (no matter how great) can and will lose (sometimes dramatically) to another team.   People are shocked at how Brazil can lose 1-7 at the hands of the Germans.  I as a Brazil fan and as someone who thinks a little more statistically will say “Well.. just wait.. the Germans will also inevitably experience a defeat like that at some point.” (German fans – please do not write me protesting emails).   It is inevitable, because there is a smaller sample size.

In business, we do this when we analyze markets.  We use small samples of a large population and based on those small samples, make erroneous conclusions e.g. if your target market size if 500,000 and you only interview 20 people, you are not going to get a clear picture of your target market.

  • We tend to lean on our biases and intuition and this can cause problems.  Sometimes our intuition can be right on – especially in areas that we have a lot of practice and mastery.  But many times we tend to rely on this intuition and we do so lazily – at the expense of thinking critically and mindfully.

In business, this happens when we jump to conclusions about prospects, their reasons for buying or not buying, in negotiations, in coaching our employees, etc.

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So what does all this mean?

My intention in this article is to create awareness of our human strengths and our weaknesses.  Both are humbling, uplifting and gratifying at the same time. We would not be human without our weaknesses and we would not see opportunity if not for our strengths.

Thinking statistically is both a weakness and an opportunity for us as human beings – to grow our businesses and to nurture our lives in perhaps a more realistic, less arrogant and less stressful way.

This in a practical sense will imply that we need to do more smart experiments in our business and in our lives to discover the inherent truths of our performance and our abilities to make more and greater results.  So the practical takeaway here is to learn the art and science of tinkering – to conduct smart experiments that yield useful information without spending too much time or money.

In the meantime, I say to the Brazilians “Go Brazil 2018!” and to you “Hurray for our brain capacities that can be used and nurtured for greater things”.

If you enjoyed this article, and wish to read more – please go to http://cahayamind.com/blog/

Sunil