Decision Making in the Plastics Industry – Avoid the Survivorship Bias Trap

Hello and welcome to a new post. Today we have a look at a well-known cognitive bias that psychologists refer to as “survivorship bias” and how to use this information for better decision making in our daily plastics operation.

The focus on people, companies, or products that have themselves successfully established and forgetting about other important factors such as failure is referred to as survivorship bias.

Let us put this bias in relation to some examples

Analyzing of World War II bomber airplanes

Most famous example is the US Air Force dilemma of lost airplanes during World War II. They investigated the returning airplanes and found out that the wing tips, body and tail had the most holes. Their plan was to reinforce those areas for better protection. Luckily they had Mr. Abraham Wald as part of the Statistical Research Group (SRG) on their team. He explained to the military leader that this would be a terrible mistake since they did not look at the airplanes, which were shot down. The weakest parts are not the wing, tail or body. It is the engine and once you get a hit there, the airplane will hit the ground quite fast.

Example plastics industry

Looking at the engineering polymer Polyamide, it is a well-established and successful material, which is used in lots of applications. Material manufacturers, which have their focus on other polymer resins, may want to add such Polyamide resin and compounds to their portfolio to gain a share of the cake. However, it is better to look at companies which failed to enter the market place with their new Polyamide resin or compounds, followed by companies which have mediocre sales and profit numbers when they entered with their new Polyamides. Tendency is to look at the market leaders and established companies. 

In conclusion, it pays off to look at not successful launches of products too and not only the successful ones. It is harder to find the stories of failing products, however it is worth taking the extra step and fighting the survivorship bias. 

Thanks for reading and #findoutaboutplastics

Greetings

Herwig Juster

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Literature

[1] http://blog.idonethis.com/7-lessons-survivorship-bias-will-help-make-better-decisions/