Zoom Out, Zoom In
Combine base rates from comparable situations with direct observation of the particular case. The outside view establishes a reference point; a close-up reveals details that averages can miss.
THE IDEA
Zoom Out, Zoom In
- Often we trust “the averages” over our instincts—but not as much as we should.
• We trust the horrible reviews of the Polynesian Resort. But we don’t always seek reviews for our most important decisions (new job, college major).
- The inside view = our evaluation of our specific situation. The outside view = how things generally unfold in situations like ours. The outside view is more accurate, but most people gravitate toward the inside view.
• Jack knows his Thai restaurant will be a hit. Lumping himself with other restaurants feels wrong.
• Kahneman’s curriculum story: Even the dean, who knew the base rates, got stuck in the inside view.
- If you can’t find the “base rates” for your decision, ask an expert.
• You might ask an IP lawyer: “What percentage of cases get settled before trial?” etc.
• Warning: Experts are good at estimating base rates but lousy at making predictions.
- A “close-up” can add texture that’s missing from the outside view.
• Brian Zikmund-Fisher studied the base-rate outcomes of patients with MDS, but he also sought a close-up (discovering the need for exercise and a “third adult”).
• FDR had his staff compile a statistical “mail brief,” and he also read a sample of the letters.
• More close-ups: Xerox’s customer officer of the day. “Going to the genba.” Using competitors’ paper towels.
- To gather the best information, we should zoom out and zoom in. (Outside view + close-up.)
Why “almost”? Jack has some control over the situation in a way that the Polynesian Resort’s guests don’t: His experience and his cooking and his business savvy do matter. The point is that these differences are all he sees, so the spotlight effect will lead him to overweight them. He will tend to forget that he can’t affect the macro Austin environment for restaurants any more than a guest can affect the cleanliness of the Polynesian Resort. So while the factors he controls may adjust the odds in his favor, they’re unlikely to transform the odds.
A distinction about “zooming out and zooming in”: “Zooming out” is synonymous with taking the outside view, but zooming in is not synonymous with taking the inside view. The inside view is always inside our heads. When you think “zoom out, zoom in,” think photography. You can’t take a photograph inside your head; you point your camera at the world outside and zoom out and zoom in to capture it.
When to use it
Deciding whether to start a business in a competitive market: check start-up failure rates (outside view) and talk to local entrepreneurs (close-up).
Choosing a medical treatment: consult clinical success rates and speak with patients who have undergone the treatment.
Evaluating a job offer: compare industry salary ranges and career progression, then visit the office and meet potential colleagues.
Making a large purchase like a house: examine market trends and neighborhood statistics, and walk through the property and surrounding area.
FROM THEORY TO EVERYDAY LIFE
In practice
Jack's Thai restaurant
Jack believes his Thai restaurant will succeed despite high failure rates for new restaurants. He overweights his personal control and ignores base rates.
Kahneman's curriculum story
The dean of a school, even knowing base rates for curriculum development, became overly optimistic when planning a new program, falling into the inside view.
A MOMENT TO REFLECT
Put it to work.
How can you find base rates for a decision you are facing right now?
What close-up details might be missing from the statistical averages that could change your understanding?
Think of a time you relied too much on your own inside view; how might an outside view have changed your decision?
CONTINUE THE CONVERSATION
Source texts
- Decisive How to Make Better Choices in Life and Work (Chip Heath)