New information is always valuable to your strategy in life, business, and the occasional game show.
Note: I woke up this morning and found an obituary to game show host Monty Hall of Let’s Make a Deal fame. This is a draft that was buried deep in my queue that I thought might be a sort of mini-tribute to Mr. Hall. RIP Monty.
The famous game show host Monty Hall used to rule the airwaves with Let’s Make a Deal. He left some lessons that matter a lot for your thinking on business (or career) strategy.
The Monty Hall problem
One of the most memorable aspects of the Let’s Make a Deal show was the “three doors” scenario. In that scenario, Mr. Hall would show the contestant three doors with the promise of a fabulous prize behind one of them, and then have the contestant pick one. After the contestant picked, Monty would reveal what was behind one of the other two doors–usually some funny item like a goat…and then give the contestant a chance to change their original choice to the remaining (third, and unrevealed) door.
This little game, as simple as it is, has left us with what is known as the “Monty Hall Problem.” The correct solution to the little game is for the contestant to always switch doors to the remaining door (more on that in a second). The “problem” is that this solution is entirely counter-intuitive to even highly experienced and educated people. These people see the original choice as completely independent of the subsequent revelation and proffered opportunity to switch doors. The say “the odds of winning were 1 in 3 at the start, and that didn’t change just because ol’ Monty revealed what was behind one of the other doors.”
And, they are wrong.
The answer is to always switch, and while the explanation of that answer can be done quantitatively through multiple means (that link above has plenty of them), the simplest explanation that I have encountered is this: Imagine that instead of three doors, Monty presents 100 doors, still with only one of them containing a fabulous prize. Then, the contestant chooses one. Monty then opens 98 of the remaining 99 doors to reveal that each one is worthless, leaving one unopened door. What should the contestant do now?
It’s much clearer now that Monty has presented very valuable information by revealing 98 doors as worthless. So the one door Monty hasn’t revealed becomes very likely the one with the prize. The contestant goes from a choice that had a 1% chance of success to one that is nearly certain to win by switching.
All this is well and good, but why does it matter?
It matters because you are faced with opportunities to make choices based on updated information all the time. And, sticking with your prior choices when new information says that doing so is a bad idea makes you…un-smart. I’ve written on the value of this kind of thinking before, in one of my earliest posts. But the “three doors” as a specific case plays out more often than you think.
You might be making choices about what markets to emphasize and settle on two of them because you think that your product is competitive. Then, you find out one of them is no longer a good fit. Maybe the competition launched a killer app. What do you do? You switch. That might mean you develop your own product, but it definitely means you update, you adjust.
One that hits close to home for me relates to career choices. Perhaps you’ve cast your lot with a boss who looked interesting and visionary at the start when you took the job, but who after a few years of exposure is revealed to be a tyrant and schemer. What do you do? Do you stick with your original boss choice because you already chose? Not at all. Ol’ Monty taught you something: Switch!!!
Just remember, when you’ve picked door number 1, it doesn’t mean you are stuck with it. Your experience provides you with some additional valuable information, and sometimes it makes sense to switch your choice.
Thank you Monty Hall!
What do you think?