A coherent story imposed on past events creates false confidence in understanding their causes.
Taleb's term. The test is whether the story would have been just as satisfying had the outcome reversed. Most business and biographical explanation fails it.
In practice
- A firm's decade of growth is explained by its culture, and the identical culture would have explained its collapse.
- A retrospective on a successful launch names the reason; the same team's failed launch would have named the same factor with the sign reversed.