The Paradox of Skill

Skill is not required to succeed. It is not the sole determining factor of any instance of success. Hard work and dedication are major keys. However, a combination of skill, hard work, and dedication does not guarantee success. Quite frankly, nothing can guarantee success at a one hundred percent rate. This is where the paradox of skill comes into play. Luck is always a factor, no matter the level of skill.

It is a common belief that as skill increases, the effect luck has on an outcome decreases. The belief is skill, hard work, and effort are the reasons for success and that luck helps those who are less skilled makeup for it. The real paradox is that as skill increases across the board, it is actually luck that has a larger level of impact in creating outcomes. Sports as a whole showcase this paradox very clearly.

In the National Football League, the gap in skill between the best, average, and worst players at any one position is relatively slim. After all, each of them was probably one of the best players on their college teams and created the opportunity to become professional athletes. The skill level between the most valuable player of the league and the worst player at his position is far less significant than you would expect.

Contrast this idea with high school football. With maybe one or two players on an average team opting to play college football, it is generally very easy to see immense skill variation at this level. The best players stand out and the disparity of skill between the best, average, and worst players is clear.

In predicting outcomes and realizing outcomes, skill plays a much larger role in high school football than in the National Football League, where luck has a much larger impact. Would Patrick Mahomes still be Patrick Mahomes if he was drafted to a different team with a different Coach, and with a different set of circumstances? Luck was a factor in giving Patrick a stable opportunity to showcase his skill. The same could be said about nearly any player across any team and any league. Skill got them there but luck helped create the outcomes.

This methodology can be applied to any other sport and any other industry. As people become more and more skilled, as they have more and more technology, support, and ability to succeed, the determining factor for success is not knowledge or ability, luck is more important than ever. There are more singers than ever posting clips onto social media apps trying to be recognized. All it takes is the right person to come across their video and their lives can be changed. Luck has a large impact here, more than skill. Investing in financial markets is the same way. More and more firms are using the same materials, hiring more MBA graduates, and paying attention to the same trends. Luck has an impact in realizing profits and making the right decisions.

Keep working hard, keep training to be the best, keep growing skills, but accept sometimes it takes a lucky break. That is the paradox.