Fooled by experience

Abstract

We interpret the past—what we’ve experienced and what we’ve been told—to chart a course for the future. It seems like a reasonable approach, but it could be a mistake. The problem is that we view the past through filters that distort reality. One filter is the business environment, which focuses on outcomes rather than the processes that lead to them and celebrates successes while ignoring failures, thus making it hard for us to learn from mistakes. Another is our circle of advisers, who may censor the information they share with us. A third filter is our own limited reasoning abilities.