A new study from Stanford Business School tells us something we probably already know: people tend to become more cautious when they can’t predict what is going to happen.
Researchers discovered that when faced with a choice between being given a guaranteed $100 or having a 50:50 chance of winning $200, significantly more people chose the guaranteed $100. Similarly, when faced with the choice between losing $100 or having a 50:50 chance of losing either $200 or nothing, more people chose the certainty of the smaller loss.
The researchers explained:
“People really don’t like the complexity and cognitive load of making decisions under uncertain circumstances.”
In other words, when it is difficult to predict what is going to happen, people tend to choose what seems like the safer option.
So far so good.
But in a world where everything is changing, this creates two problems.
First, what we think are the safer options might not be safe any more. A changing world might not work the way it used to, so choosing what seems like the safer option can lull us into a false sense of security that actually increases our risk.
And second, when people automatically choose what seems like the safer option they miss out on finding the new opportunities that are also emerging in a time of change.
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What Can We Do About This?
There are three steps that we can take to address this natural human tendency in our decision making.
The first is to learn to stay more centred and grounded in the face of uncertainty and to make clearer sense of the situation. This makes us feel safer so we have less need to go for the cautious option. The tools of Chapters 1 and 2 enable us to do this.
The second is to then get better at finding more opportunities in the situation and choosing the one that is best for us, even when the situation is unclear and the outcome is uncertain. This brings us more options and it improves our decision-making. Chapters 3 and 4 bring us the tools to do this.
And the third step we can take is to learn to describe our chosen way forward in ways that inspire us and the people around us to long to make it happen: because when all ways forward are uncertain, the best path to success is the one that gives the most people the most energy to long to make it happen. Chapters 5, 6, and 7 bring us tools to achieve this.
Most human beings seek to avoid risk. That’s just the way it is. But in a time of change, when the past is no longer a guide to what might happen in the future, ‘playing it safe’ actually increases our risk and hides the opportunities that are emerging.
By taking the three simple steps described above, we can overcome our uncertainty, reduce our risk, and increase our opportunities and our enthusiasm to achieve them. All of which will make us more antifragile: able to use change to become stronger, more valuable, and more likely to get the results we most want.
Have you ever taken a decision where the outcomes were uncertain? Did you choose what seemed like the safest option? Would it have been useful to have known how to explore the other opportunities more fully?
Photo By Dean Hochman via StockPholio.net