All-or-Nothing Thinking
A cognitive distortion where events are viewed in black-and-white terms, with no shades of gray. This thinking drives motivated reasoning and self-serving bias, making learning from experience difficult because outcomes are seen as either 100% due to skill or 100% due to luck.
THE IDEA
All-or-nothing thinking rears its head again
Black-and-white thinking, uncolored by the reality of uncertainty, is a driver of both motivated reasoning and self-serving bias. If our only options are being 100% right or 100% wrong, with nothing in between, then information that potentially contradicts a belief requires a total downgrade, from right all the way to wrong. There is no “somewhat less sure” option in an all-or-nothing world, so we ignore or discredit the information to hold steadfast in our belief.
Both of these biases cause us to see our outcomes through the equivalent of a funhouse mirror. The reflection distorts reality, maximizing the appearance of our skill in good outcomes. For bad outcomes, it makes skill all but disappear, while luck looms giant.
Just as with motivated reasoning, self-serving bias arises from our drive to create a positive self-narrative. In that narrative, taking credit for something good is the same as saying we made the right decision. And being right feels good. Likewise, thinking that something bad was our fault means we made a wrong decision, and being wrong feels bad. When our self-image is at stake, we treat our fielding decisions as 100% or 0%: right versus wrong, skill versus luck, our responsibility versus outside our control. There are no shades of grey.
Fielding outcomes with the goal of promoting our self-narrative and doing it in an all-or-nothing fashion alters our ability to make smart bets about why the future unfolded in a particular way. Learning from experience is difficult—and sometimes impossible—with this kind of biased, broad-brush thinking. Outcomes are rarely the result of our decision quality alone or chance alone, and outcome quality is not a perfect indicator of the influence of luck or skill. When it comes to self-serving bias, we act as if our good outcomes are perfectly correlated to good skill and our bad outcomes are perfectly correlated to bad luck.* Whether it is a poker hand, an auto accident, a football call, a trial outcome, or a business success, there are elements of luck and skill in virtually any outcome.
That the motivation to update our self-image in a positive way underlies self-serving bias gives us an idea of where we might look for solutions to overcome the bias. Maybe we could stop clinging to ego, giving up on that need to have a positive narrative of our lives. Maybe we could still drive a positive narrative but, instead of updating through credit and blame, we could get off on striving to be more objective and open-minded in assessing the influence of luck and skill on our outcomes. Maybe we could put in the time and hard work to retrain the way we process results, moving toward getting our positive self-image updates from accurate fielding, from truthseeking.
Or maybe we could detour around the obstacles altogether by finding a work-around that doesn’t require us to address self-serving bias at all.
When to use it
Evaluating the outcome of a business decision to understand the contributions of skill and luck.
Assessing a poker hand to improve future play by separating decision quality from short-term results.
Reacting to a sports call to maintain a balanced perspective on team performance.
Interpreting a medical test result to avoid overgeneralizing about health status.
FROM THEORY TO EVERYDAY LIFE
In practice
Student reacting to a single test grade
A student receives a B on an exam and immediately concludes they are a failure, ignoring that they understood most of the material. Conversely, an A makes them believe they have mastered the subject perfectly. The all-or-nothing mindset prevents them from identifying specific areas for improvement.
Entrepreneur evaluating a product launch
An entrepreneur launches a product that performs modestly. Instead of seeing both successes and failures, they either claim total genius (if they focus on a few good metrics) or total failure (if they focus on poor metrics), missing the nuanced lessons about customer segments, pricing, and marketing.
A MOMENT TO REFLECT
Put it to work.
Recall a time when you treated an outcome as either completely due to your skill or completely due to luck. How might a more nuanced view help you learn from that experience?
Think of a belief you hold strongly. Are there any grey areas or degrees of confidence you are ignoring because of all-or-nothing thinking?
How does all-or-nothing thinking affect your ability to update your beliefs incrementally when new information arrives?
CONTINUE THE CONVERSATION
Source texts
- Thinking in Bets Making Smarter Decisions When You Dont Have All the Facts (Annie Duke)