Beyond Survivorship Bias: Learning from the Past to Shape Future Successes

In the fast-paced world of hospitality, where trends come and go, and customer preferences evolve rapidly, it's easy to get caught up in the pursuit of success. We often look to industry leaders for guidance, hoping to replicate their achievements and copy their strategies. But what if some of the most valuable lessons for our industry can be found not in the present but in the past?

During World War II, military analysts faced an extreme and important challenge: how can they better protect their aircraft from enemy fire. The traditional approach seemed logical—reinforce the areas of the planes that sustained the most damage. In this case, many returning aircraft had bullet holes in the wings, tail, and fuselage so what seemed logical was to reinforce these areas. However, a U.S based statistician, Abraham Wald saw things differently.

Wald's insight was as simple as it was insightful: instead of focusing only on the bullet-ridden areas of returning planes, he examined where there were no bullet holes. Why? Because those were the spots where planes that didn't return were likely hit. By reinforcing the untouched areas, rather than the damaged ones, Wald proposed a strategy that saved countless lives.

This logical error humans make is known as ‘survivorship bias’, whereby attention is paid only to those entities that have passed through or ‘survived’, which can often lead to incorrect assumptions. This bias is commonly recognised as a concern in experimental design and in science more generally, however it also can influence personal decision making in other aspects of life, like business.

Within the industry, we often celebrate success stories in our field—the busy hotels, the award-winning restaurants, the innovative travel experiences. But what about the businesses that failed to take-off? What about the businesses that didn't make it, the ideas that fell flat, the strategies that led nowhere? Just as Wald encouraged military analysts to look beyond the surviving planes, we must also broaden our perspective and study both the successes and the failures in our industry. Understanding what didn’t work can be as crucial as knowing what did.

Consider the tech start-ups that disrupt entire industries with their innovative ideas. We admire their vision and their ability to challenge the status quo. But for every success story, like Airbnb or Uber, there are numerous start-ups that never made it off the ground. What can we learn from their mistakes? How can we apply those lessons to our own ventures within the hospitality industry?

And what about investment strategies? Investors often look to the latest trends or follow the crowd, hoping to replicate the success stories of the past. However, as demonstrated by Wald, blindly following the herd can lead to missed opportunities and unsuccessful results. This is not limited to innovation alone; it goes beyond to decision-making. Instead of giving in to traditional insights, we should approach every decision with a critical eye, questioning assumptions and investigating new opportunities for growth. We should be asking questions like: is there another perspective we haven't considered, and are we aiming for something bigger than just duplicating??

So, perhaps we need to look at things differently and embrace Wald's philosophy of looking beyond the obvious. Let's not only celebrate our successes but also learn from our failures and the failures of others. This means challenging the traditional way, questioning our assumptions, and exploring new possibilities as it is important to remember that the most ground-breaking ideas often come from looking at things differently. The question is whether we are really ready to break away from what’s always been done? Are we prepared to challenge what we think we know and try something new?

Written by Izzy McHattie, EP Business in Hospitality