Are society’s wealthiest and most successful individuals simply the lucky ones?
What is necessary for success? What are the secrets of the wealthiest individuals? The readership of periodicals like Success, Forbes, Inc., and Entrepreneur shows that people are obsessed with finding out the secrets to success. The core premise is that we can learn from them because it was their individual traits—talent, skill, mental toughness, work ethic, persistence, optimism, growth mindset, and emotional intelligence—that propelled them to where they are now.
Success magazines and the way we allocate resources in society—from employment chances to fame to government funding to public policy decisions—are all predicated on this supposition. Assuming that the most successful people are also the most capable, we frequently provide resources to people who have a history of success while ignoring others who have failed.
But is this supposition accurate?
Psychologist Scott Barry Kaufman has devoted much of his professional life to researching the psychological traits that influence creativity and success. In his book Wired to Create he describes how he discovered that a select group of characteristics, such as drive, tenacity, creativity, intellectual curiosity, and openness to new experiences, do considerably explain variances in success, Kaufman was still surprised by how much of the variation is frequently unaccounted for.
Numerous studies and books, most notably those written in recent years by risk analyst Nassim Taleb, in his book The Black Swan; investment strategist Michael Mauboussin, in his book The Success Equation, and economist Robert Frank, in his book Success and Luck: Good Fortune and the Myth of Meritocracy, have raised the possibility that chance and luck may be far more important than previously thought in a variety of industries and careers, including financial trading, business, sports, art, music, literature, and the sciences. Their claim is not that talent is everything; talent obviously matters. Instead, they argue that the evidence reveals that if we solely concentrate on human attributes in an effort to understand the causes of success, we miss out on a very important component of the success picture—luck and chance.
Here are Some Other Research Findings
- Branko Milanovic published a report for the World Bank and University of Maryland that showed differences in income across various cultures and countries is accounted for by their country of residence and income distribution in that country, not talent and skills.
- The impact of scientific research is randomly distributed, with high productivity alone having a limited impact on the likelihood of high-impact work in a scientific career according to a scientific study by Roberta Sinatra and colleagues published in Science;
- According to a study by Qianqian Du, Huasheng Gao and Maurice D. Levi, published in The chance of becoming a CEO is influenced by your name or month of birth; the number of CEOs born in June and July is much smaller than the number of CEOs born in December.
- According to a study by Liran Einav and Leeat Yariv published in the Journal of Economic Perspectives,academics with last names that appear earlier in the alphabet are more likely to receive tenure at top departments at Universities.
- A study by Wijnand A.P. van Tilburg and Eric R. Igou published in the European Journal of Social Psychology showed that the display of middle initials increases positive evaluations of people’s intellectual capacities and achievements.
- A study by S. Laham and colleagues published in the Journal of Experimental Social Psychology found that People with easy to pronounce names are judged more positively than those with difficult-to-pronounce names.
- A study by Bentley Coffey and Patrick McLaughlin found that females with masculine sounding names are more successful in legal careers.
Are the most successful people in our society simply the luckiest people in our society? This intriguing topic is brought up by the significance of the hidden dimension of luck. If this were even remotely accurate, it would have a tremendous impact on how we allocate our limited resources and the likelihood that the wealthy and successful will truly benefit society (versus benefiting themselves by getting even more rich and successful).
The Italian physicists Alessandro Pluchino and Andrea Raspisarda joined forces with the economist Alessio Biondo to create the first ever attempt to quantify the influence of luck and talent in successful careers in an effort to shed light on this weighty topic. They published their results in Physics and Society. In their earlier work, published in the same journal they revisited the Peter Principle from a mathematics perspective.
They cautioned against a “naive meritocracy,” in which people fail to respect and reward the most qualified individuals because they underestimate the significance of chance among success factors. They devised a “toy mathematical model” to simulate the development of a population’s careers over a 40-year work-life in order to formally describe this phenomena (from age 20-60).
The Italian researchers created a large number of fictitious people (called “agents”) with varying levels of “talent,” and then they let their lives play out over the length of their whole working careers. They stated that skill is any combination of personal qualities that enable an individual to take advantage of fortunate circumstances (I have already argued that this is a valid definition of talent). Talent can be characterised by qualities like intelligence, skill, drive, tenacity, originality, emotional intelligence, etc. The important thing to remember is that brilliant individuals are more likely to make the most of an opportunity.
The simulation started with the same amount of success for each agent (10 “units”). Individuals experienced a predetermined number of fortunate events (in green) and a predetermined number of bad events every six months (in red). When someone experienced a bad event, their success was cut in half, and when they encountered a good event, their success increased by twice as much as their talent (to reflect the real-world interaction between talent and opportunity).
What did Pluchino and Raspisarda discover?
The “Pareto Principle,” also known as the “80/20 principle” by Richard Koch, states that a small number of people will ultimately succeed to the extent of the majority of the population. In the Italian researchers simulation, while skill was distributed normally in the final results of the 40-year simulation, success was not. Nearly half of the population had less than 10 units of success, while the 20 most successful people possessed 44% of the total quantity (which was the initial starting condition). This is congruent with data from the actual world, however other evidence suggests that economic success is spread much more unequally there, with just eight persons holding as much money as the poorest half of the world.
Even if a distribution that is so unequal may seem unfair, it might be justified if it turned out that the most successful individuals also happened to be the most brilliant or competent. What did the simulation discover, then? On the one hand, ability has some bearing on success. In general, individuals who were more talented had a larger chance of expanding their success by taking advantage of the opportunities presented by serendipity. Additionally, the majority of the most successful agents had at least average talent. Talent was crucial, then.
The most talented people were rarely the most successful, thus talent alone was unquestionably insufficient. People who were average but lucky typically had far greater success than those who were more brilliant but unlucky. The most successful agents tended to be those who had excellent luck in their life but only slightly above average talent.
Losing one’s talent is undoubtedly unfortunate for both the person and society as a whole. What then can be done to ensure that individuals who have the greatest potential for success are given the opportunities they most need to succeed? Next, let’s discuss it.
The “Matthew Effect”
Many meritocratic methods for distributing honours, money, or incentives are frequently based on an individual’s prior achievements. This method of choosing people results in a situation where the wealthy get richer and the disadvantaged get poorer ( referred to as the “Matthew effect” by psychologists Scott Barry Kaufman). But is this the best approach to unlocking potential? Giving huge awards to a select few previously successful candidates or a number of smaller grants to a large number of averagely successful applicants is a more efficient funding method for maximising global impact. This fundamental query about resource allocation requires factual data to be answered.
Think about a research by David Currie and Jean-Michel Fortin published in the journal PLOS ONE that investigated whether greater funds result in larger findings. They discovered a constructive, albeit extremely weak, correlation between funding and impact (as measured by four indices relating to scientific publications). Additionally, recipients of multiple grants were no more productive than those who had received one, and financing generally had a negative impact on impact.
According to the authors, funding schemes that prioritise diversity above “excellence” are likely to be more beneficial to society as a whole. Researchers Philippe Mongeon and colleagues examined the funds given to 12,720 researchers in Quebec over a fifteen-year period in a more recent analysis. They came to the conclusion that “the concentration of research financing in the hands of a so-called ‘elite’ of academics often delivers diminishing marginal returns, both in terms of the amount of articles produced and of their scientific significance.”
The European Research Council awarded the biochemist Ohid Yaqub 1.7 million dollars to accurately assess the degree of serendipity in research because they take these kinds of findings seriously. Yaqub developed a multidimensional definition of serendipity and identified several mechanisms, such as keen observation, “managed sloppiness” (allowing unexpected events to occur while tracing their causes), and the cooperative effort of networks of scientists.
This is in line with Dean Simonton’s considerable research published in his book, Creativity in Science: Chance, Logic, Genius and Zeitgeist on the contribution of chance and serendipity to the development of innovative and significant scientific discoveries.
The Italian team that modelled how luck plays a part in success expanded on Simonton’s work in their simulation. They experimented with the efficiency of various funding tactics while pretending to be God. Over the course of each agent’s 40-year career, they used a different strategy every five years. Even without any money, they could immediately see that the most prosperous agents were really fortunate individuals with average levels of talent. What happens when different financing opportunities are added to the simulation?
The researchers showed how the result distributions of the environments with abundant possibilities for everyone (top) and the environments with few opportunities for everyone differ from one another (bottom). A few of medium to highly skilled people were able to achieve very high levels of success in the universe simulated at the top, and the average number of these people who achieved at least above average levels of success was fairly high. The total level of success of the society was low in the universe simulated at the bottom of the image, with an average of only 18 people being able to improve their original level of success.
Conclusion
The outcomes of this illuminating simulation by the Italian scientists strongly show that chance and luck are undervalued factors in determining an individual’s level of achievement, which is consistent with a growing body of research based on actual data.
According to the researchers, since resources and rewards are frequently given to those who are already highly rewarded, this frequently results in a lack of opportunities for those who are most talented (i.e., have the greatest potential to actually benefit from the resources), and it ignores the crucial role of luck, which can manifest itself spontaneously throughout the creative process.
The researchers contend that a stimulating environment rich in opportunities for all participants, not just the superstars, as well as a solid education, thorough training, and an effective plan for allocating finances and resources are all crucial in increasing people’s chances of success.
This research shows that luck and chance do play a significant role in determining one’s success, not just merit and talent.