It’s a skewed sample of management practices we draw on — survival bias warps our understanding

Scott Berkun, The Myths of Innovation (O’Reilly 2007) at 7, attacks the myth that innovation has a methodology. One reason we can’t follow a recipe to be creative is that we can’t take an objective view. “The problem is that we’re biased by what we can’t see.” We rarely see, as general counsel, when other’s management efforts fail.

Put more generally, missteps happen when someone draws a conclusion too broad for the data set to support, such as when the data itself was pre-selected and partial. Unwittingly, we pay too much attention to winners and not enough to also-rans, we reason back only from the subset of successful examples, and therefore we succumb to survivor bias (See my post of April 2, 2005: the survivor bias; Jan. 14, 2007: Whig history; March 20 2007: poor statistical results if data drawn from a selective pool; and Sept. 1, 2008: we reason back from successful examples only.).

Survivor bias has analogies to trend-spotting, where one or two instances of publicized actions are magnified into a ground swell of change. Salience creates a variant of survivor bias in that we pay disproportionate attention to the departments profiled in adulatory trade journals.

Survivor bias also relates to publicity by law departments. If the general counsel frowns on public exposure of the law department’s managerial prowess, the world will never know (See my post of Dec. 31, 2010: some law departments do not share their experiences with offshoring lest they lose a competitive advantage; and Jan. 12, 2011: Pfizer’s blast of publicity.).

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