Talent vs Luck: The role of randomness in success and failure

The distribution of wealth follows a well-known pattern sometimes called an 80:20 rule: 80 percent of the wealth is owned by 20 percent of the people. A report last year shows that just eight men had a total wealth equivalent to that of the world’s poorest 3.8 billion people. The distribution of wealth is among the most controversial because of the issues it raises about the role of randomness in success and failure.

Why should so few people have so much wealth? The most common explanation is that the wealthy have earned it, whether by IQ or intelligence or talent, virtuous hard work or sheer rapacity. Or all of the above, though it’s kind of tough to be both virtuous and rapacious.

But what about good old dumb luck? Luckily we have an answer thanks to the work of Alessandro Pluchino at the University of Catania in Italy and a couple of colleagues. These guys have created a computer model of human talent and the way people use it to exploit opportunities in life. The model allows the team to study the role of randomness in success and failure.

Some findings of the Study: The role of randomness in success and failure

• 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 other months.
• Those with last names earlier in the alphabet are more likely to receive tenure at top departments in Universities.
• The display of middle initials increases positive evaluations of people’s intellectual capacities and achievements.
• People with easy to pronounce names are judged more positively than those with difficult-to-pronounce names.
• Females with masculine sounding names are more successful in legal careers.

A number of studies and books–including those by risk analyst Nassim Taleb, investment strategist Michael Mauboussin, and economist Robert Frank– have suggested that luck and opportunity may play a far greater role than we ever realized, across a number of fields, including financial trading, business, sports, art, music, literature, and science. Their argument is not that luck is everything; of course, talent matters.