When it comes to data and making decisions, most of us leave an incredibly valuable tool sitting unused in our proverbial decision-making toolboxes. PROBABILITY, defined as the likelihood something will or will not happen. You may know it as “the odds”. We don’t use this tool because we may not have wrapped our heads around it (acceptable, we can learn!) or because we think it doesn’t help us (a myth, let me convince you why).
So, why is this and and why is it important?
I’ll get right back to that, but I first need to ask a favor: PAUSE — Please do not search on the internet for the term “probability”. If you do, one of the very first things you will read is how a coin toss has 50/50 chances of landing on heads or tails. Herein lies a common next misstep – it is incredibly easy to interpret equal chances as meaning that the odds don’t matter or that an answer is unknowable. This is far from the case, but even the those of us who understand probability mess this up in certain situations.
Case in point, there is a true story of a world leader deciding if he should authorize a now infamous military action and he says on record, “this is a 50-50 shot” while deciding. Only it wasn’t. The official probability calculations were closer to 5:3 in favor of the operation being successful. He authorized the action and it was successful. The probability odds were right and it was not equivalent in likelihood to a coin toss.
So why did a well-educated and experienced leader say it was a toss-up decision when if he were using those same 5:3 odds while selecting his fantasy sports team he would likely have been discussing why that data was helpful? There is a pervasive gut tendency to think certain decisions are either guaranteed or unknowable when they are actually likely or unlikely. Throw in a healthy dose of not wanting to be wrong, and we have a recipe for saying something can’t be known, when degrees of certainty are actually quite knowable.
I’d like to make the case that this affects everyone reading. We come to conclusions and make decisions every day based on what we expect to happen, and we often do so with minimal data backing up those expectations. The value of harnessing probability is that it examines how certain you should be and how right you’ve been in the past. Probability tells you that if there are 9:1 odds something is likely to happen, the right answer is “yes!”, and not “maybe” or “I don’t know”.
How can this help you? Consider the following examples …
Question: “What are the odds of X sports team winning their next game?”
Answer: Between Vegas betting odds, fantasy leagues, sport media, and sports fans A LOT of people feel comfortable having this probability scenario.
Now think about these ….
Question: “Do we think the Smith family will renew their membership with us?”
Or how about …
“If I ask our newest member to donate to our campaign, do you think they will?”
Answer: “I think maybe, but that’s really hard to know!”
Or better yet …
“That’s a coin toss, I’m not sure we can know until we try.”
Examining and analyzing data is one of the biggest reasons I love my role at Daxko. You can use probability in your daily work or in your life as well. And seeing that most people are in the process of selecting their fantasy football teams right now, it’s a great time to put probability to work.
Constance M. is a Product Manager who enjoys organizing stuff and all things Joss Whedon.
About the Author
Constance is Daxko's Senior Data Strategist and leads the Daxko Data Analytics team.More Content by Constance Miller