The Story of Abraham Wald
The Brilliant Statistician
Abraham Wald was born in Kolozsvar, Hungary in 1902. He is best known for his work on decision theory, geometry, and economics, among other things. Wald graduated from the University of Cluj Romania with a degree in mathematics in 1928. After that, he enrolled at the University of Vienna, where he earned a Ph.D. in mathematics. He eventually decided to continue with econometrics research in the United States. After Japan's attack at Pearl Harbor, the U.S. government decided to win the war with math and statistics. They asked Wald to propose a strategy and solve the difficulties of having all of their planes shot down, as Abraham Wald was regarded to be one of the most brilliant mathematicians at the time. This is one of the many reasons why Japan had to surrender on September 2, 1945. If it had not been for Abraham Wald, the situation might have gotten even worse for the United States and Japan. Wald died in 1950, sadly, before he was able to enjoy a long and happy existence.
WW2 and Statistics
The U.S. military was trying to determine how best to protect their airplanes from enemy fire during World War II. Still, they didn't want a solution that would compromise flight capabilities. If vital components like engines and fuel tanks were concealed, metal plates covering all aircraft parts would result in malfunctions or even explosions in the air. Wald came up with a solution, and the obvious thing to do would be to figure out where these additional protective layers should be placed on each aircraft so as not to create another performance limitation. Wald figured out a unique answer for this problem by first considering it as a statistical question. He made a model based on the data demonstrating where planes were most likely to be damaged under specific circumstances.
The Missing Bullet Holes
The story of the missing bullet holes is a story of survivability and efficiency, showing us the logic behind thinking about cost as survival. The majority of this narrative is derived from Wald's writings. He describes his work, discusses the context and history of his research, and how it has been used to resolve medical decision-making and transportation safety issues. Armoring the planes too much is a problem; armoring them too little is also a problem. Somewhere in between, there's an optimum solution. There were more bullet holes in the fuselage, not so many in the engines. The armor said Wald shouldn't go where the bullet holes are. It needs to go where the bullets aren't: on the engines. Wald's insight was to ask: where are the missing holes? Wald was pretty sure he knew the missing bullet holes were on the missing planes. Wald's other advantage was his tendency toward abstraction. A mathematician is always asking, "What assumptions are you making?"The engine is a point of total vulnerability. Wald's recommendations were quickly put into effect and were still being used by the navy and the air force through the wars in Korea and Vietnam.
Why this is important for business
It is essential to understand Wald's story and the lessons we can learn because we tend to be too focused on what is staring us in the face and neglect to see what's missing. We might miss problems, opportunities, and threats that remain hidden until their impact becomes clear. These blind spots can be difficult to identify and correct because many business solutions are based on a more undisciplined way of thinking about the world. Wald's tale and the lessons it can teach us might help us achieve just that. Sometimes different approaches can lead you to ignore features of the problems that matter. Too often, when we try to solve a problem or seize an opportunity, we apply the same approach that worked in the past. In these situations, it's easy to assume that because something worked before, it will work again. But suppose your previous success was based on a set of circumstances unique to you and specific to your environment. In that case, this might not be an accurate predictor of how much effort, resources, and time you need to put into finding a solution. Wald's story has important implications for all sorts of problems we face as individuals and as managers: whether it involves making good technical decisions, hiring decisions, and even diagnosing health problems.
Summary
Abraham Wald worked as part of the Statistical Research Group at Columbia University during World War II. His job was to advise armed forces on how to allocate their resources best. In this capacity, he came across the problem of how the U.S. military should decide which areas of their planes need to be covered in armor. Protecting pilots is one of the main reasons for having planes in the first place. The story says that Wald predicted where the missing bullet holes were going to be based.
