Why leaders need to understand Black Swans and Survivorship Bias
Survivorship bias is a cognitive error that arises when attention is focused on those that have succeeded, endured, or remained visible, while those that failed or disappeared are ignored. This absence of data can produce misleading conclusions about what causes success, particularly in business and entrepreneurship.
The structure of the bias
The bias emerges when the sample being analysed is incomplete in a specific way: failures are systematically excluded. Because unsuccessful companies, strategies, or products are less visible, the data available to decision-makers is skewed toward positive outcomes.
This can lead to false causal inferences. Traits observed among surviving firms may be assumed to explain their success, even if those same traits were common among firms that failed. The missing counterfactuals remain unseen, but are no less relevant.
Survivorship bias in business
In business contexts, survivorship bias is especially pervasive. Popular narratives often focus on highly successful companies and founders, extracting lessons from their behaviours, risk tolerance, or unconventional decisions. What is rarely examined are the many similar companies that adopted the same approaches and failed.
This can distort strategic thinking. Leaders may overestimate the value of bold risk-taking, long working hours, or aggressive growth strategies, underestimating the role of luck, timing, and external conditions. Investment decisions, performance benchmarks, and management practices can all be affected by this selective visibility.
The result is an inflated sense of predictability and control in environments that are, in reality, highly uncertain.
The Black Sawn
The “black swan” idea highlights a related but distinct danger: the failure to appreciate the uniqueness and contingency of individual outcomes. When leaders treat a rare success or failure as representative rather than exceptional, they risk drawing overly general lessons from singular events. This error collapses uncertainty into narrative certainty, encouraging the belief that an outcome was predictable, repeatable, or controllable when it was not. In practice, this leads organisations to overfit strategy to anomalous results, underestimate tail risks, and mistake luck or coincidence for robust causal structure—leaving them poorly prepared for future environments that differ even slightly from the one in which the outcome occurred.
How our coaching can help
Mitigating survivorship bias requires deliberate effort, as the missing data is not naturally salient. Though our coaching stratergies we help leaders notice when surviviourship bias might be at play. Effective mitigation approaches include:
- Explicitly asking “what failed?” alongside “what succeeded”.
- Disconfirmation criteria to challenge assumptions about what works and what doesn’t.
- Applying pre-mortems to surface plausible failure paths before committing to a strategy
- Separating skill from luck by examining outcome distributions, not individual success stories
- Encouraging critical challenge to success narratives, especially those tied to leadership identity
Critical-reflection coaching can support this process by helping leaders recognise narrative-driven reasoning, interrogate implicit success models, and recalibrate confidence in environments shaped by chance as much as competence.
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Sources
- Kahneman, D. (2011). Thinking, Fast and Slow.
- Taleb, N. N. (2007). The Black Swan.
- Harvard Business Review. Articles on survivorship bias and decision-making.