Michael Mauboussin on the roles of luck and skill in determing success

In a probabilistic environment, you are better served by focusing on the process by which you make a decision than on the outcome.  Blackjack is a game of chance.  That means you will do best by following a rule that reflects the real probability of being dealt the right cards: don’t hit when you’ve been dealt a seventeen or more.  But it’s crucial to bear in mind that because of the substantial role that luck plays in this process, good decisions don’t ensure attractive outcomes.  If you make a good decision and suffer a poor outcome, pick yourself up, dust yourself off, and get ready to do it again.

When evaluating other people’s decisions, you are again better served by looking at their decision-making process rather than on the outcome.  There are plenty of people who succeed largely by chance.  More often than not, they are completely unaware of how they did it.  But they almost always get their comeuppance when fortune stops smiling on them.  Likewise, skillful people who have suffered a period of poor outcomes are often a good bet, since luck evens out over time.

~ Michael J. Mauboussin, Think Twice: Harnessing the Power of Counterintuition, 2009