The Probability Illusion
Or What I Learned From Shooting Martians…
I have something of a fondness for point-and-click strategy games. The sort that don’t need any keyboard dexterity. And top of the heap in this world is probably the Xcom series by Firaxis.
The basic idea is to fight off a complex alien invasion and save mankind. There’s a sort of strategy layer where you make resourcing decisions and try to manage worldwide panic or put together a global resistance network, and a tactical layer where you send a small special forces team on individual combat missions. These get more complex as your troops level up and gain a plethora of specialised skills. I have a particular fondness for snipers, but you can tackle the challenges in different ways and with different skill-set combinations.
At higher difficulty settings the game is brutally unforgiving, especially when played ‘Ironman”, meaning that you can’t reload an earlier save if everything goes south.
In these circumstances you quickly learn that discretion is the better part of valour. You advance cautiously and make sure that your squad is strongly mutually supporting at every point.
Now a feature of these games is that if you’re going to take a shot at some bug-eyed creep, you get to see your odds of success first. And after a while, provided you’re playing on a high difficulty setting, your whole perspective on probability evolves.
The first thing is that you take a squad-wide view of probability. You might take a 60℅ shot if you’re in good cover and you’ve another two guys who’ve got good-odds shots on that target if you miss, but otherwise you’re going to think long and hard about what to do, because missing could cost you a man, and may precipitate a catastrophic downward spiral that wipes out your team. Which is a big deal.
But you also develop a very different perspective on high odds
I think for most of us, if we hear the phrase ‘90% certain’, what we translate it as is ‘certain’. With 90% odds in your favour, you proceed with confidence on the assumption you’ll ‘score’.
Take that approach with max-difficulty Xcom though, and you’re toast.
90% odds means that for every ten shots you take, at least one is likely to miss. Over the course of a game you’re going to take thousands of shots. And one miss can easily get you killed if you’re not prepared for it. I’ve had 98% shots miss.
In the game you can tackle this problem in different ways. Most often by deploying a sure-hit grenade instead of an uncertain rifle round, but also by opting to move or take defensive measures instead of shoot. But you have to recognise the problem in the first place, and it is so easy to fall for the ‘probability illusion’ and just lazily take the shot. You have to understand what failure looks like, and what your alternative actions can do to keep you safe. One of the reasons I like snipers is that (if you position them right) they’re usually too far away from the aliens to be seriously threatened when they screw up.
Now it seems to me that when we’re talking about business strategy, we are (or should be) taking a similar approach. We’re looking at the defensibility of our position, how to create a unique value chain rather than leaving it to luck whether a customer plumps for our commoditised offering over our competitors. To turn possibilities into near certainties. It’s almost the polar opposite of the stereotypical entrepreneurial model where bold ‘risk taking’ is lauded, almost for its own sake. The minority of start-ups that succeed are feted, the majority that fail are quietly ignored. And the cautious, dull, strategic approach is viewed with disdain in the headlong charge to the business Hall of Fame.
The thing is though, when you’re fighting off an alien invasion, you’re still playing to win. It’s just that you learn, usually the hard way, that you ignore the Probability Illusion at your peril. You are risk averse because that’s the only way to win.
But if you do play Xcom in a banzai fashion you can at least start all over again when you get wiped out. In the real world that may not be quite so painless.
Since writing ‘the Probability Illusion’ I’ve read Sebastian Marshall’s Roguelike, which makes broadly the same points, albeit with Tales of Maj’eyal rather than Xcom as his case study. It’s a good, left-field sort of read and I can recommend it.