How we handle uncertainties and risks

Every day we make risky choices in an uncertain world from ingrained attitudes developed over our lifetimes.  Sometimes, in the spirit of play we choose the paths of greatest risk and greatest reward, sometimes we systematically maximize the chances of success by skillfully choosing challenges for which we have fully prepared, sometimes we deliberately choose the past failures of “others” to satisfy our needs, but most often we choose to minimize risk regardless of any potential for success. These alternatives represent four primary decision making attitudes- Adventurer, Craftsperson, Victim and Bureaucrat- on an attitudinal continuum. (See Fig. 1) This post describes these primary attitudes and suggests how they affect business, politics and our everyday lives.

Although our first instincts may be to label others with one or two of these attitudes, I want to emphasize that everyone who is mentally healthy uses all of them, usually under appropriate conditions. However, we also tend to act habitually using one attitude predominantly at home, perhaps another at work and another in public, even when that may be inappropriate or counterproductive. Sometimes we get stuck in one attitude, unable to adjust our attitudinal focus even when conditions and venues change.

I first developed this attitude spectrum over 25 years ago to help me understand business and marketing decisions and first publicized it in a marketing seminar and in a book “The Handbook of Channel Marketing.”

Adventurer
An adventurer attitude playfully and fully embraces risk as a spice of life. Success is a fringe benefit which enables more risk taking. Adventurers are the innovators and early adopters of business and the arts who relish risk and fail often. They start companies, invent things, do fundamental research, try the latest gizmo, participate in extreme sports, and become explorers in every domain. Although focused on the future and willing to take risks, the adventurer attitude tends to be fuzzy on strategy and tactics; lots of trial and error which the adventurer enjoys.

Adventurers developed the first airplanes and other adventurers purchased them -based on their technical descriptions- took them to their limits and beyond, often crashed, but those who survived returned to the manufacturers and said something like “if you will strengthen the struts so that your plane can pull out of a power dive without having the wings fall off, I’ll buy another one.” The dynamics between innovating companies and early adopters is crucial for successful product evolution.

Michael Jordan was an adventurer when, while the dominant player in the NBA, he temporarily left basketball to see how far he could go in baseball. 

Teenagers sometimes drive like adventurers risking themselves and others for thrills.

We playfully embrace uncertainty when we watch or participate in games or when we gamble. A baseball player with a 330 batting average is fun to watch at the plate dueling with the pitcher, the outcome uncertain; influenced by more variables and randomness than we can absorb during each pitch and swing of the bat. A player or machine that batted 1000 or a pitcher no one could possibly hit would only interest a fanatic.

Craftsperson
A Craftsperson attitude is rational and it systematically proceeds to maximize the probability of success for a challenging objective. Success is an end in itself.  For example, professional engineers, medical doctors, and professional race car drivers all learn and systematically apply skills and methods that optimize- but do not guarantee- their chances for success in challenging situations. Craftspeople seek challenges which their skills qualify them for and use these challenges to further hone their skills. They accept risks as part of the road to success, but take no unnecessary ones. Craftspeople are focused on constructing success over the near to midterm future; they operate with proven tactics grounded in strategic principals.

Bureaucrat
The Bureaucratic attitude is usually habitual, but often reinforced by repressed fear and insecurity. It avoids perceived risks- sometimes at all costs – and studiously seeks to avoid any possibility of being associated with failure by other people or, more importantly, by its own judgment. The Bureaucrat’s first objective is to achieve and to maintain a belief in the certainty of his personal security certain; a belief for which he’s ultimately willing to compromise the security or success of his organization or his community if necessary. The Bureaucrat invests little conscious effort in what he does; he operates from habit and floats in the immediate present.

Past successes of others, which earned them reputations and pools of resources, attract bureaucrats because an association with them distances bureaucrats from perceived risk and association with failure; even when these bureaucrats fall short personally. For this reason, larger institutions with past successes and large pools of resources tend to attract bureaucrats as employees-including top executives- and as customers. Bureaucratic customers buy products for the benefits attested to by other customers, including the benefits of dealing with established suppliers that they expect to keep them from failing.  

Before we castigate the Bureaucrat, please realize that almost all of us assume this attitude most of the time about most of what we do! It enables us to live as members of stable families, businesses and communities out of habit and with a sense of comfort. For example, most of us drive like bureaucrats: we learn just enough about how to drive to avoid accidents and tickets; and seldom put conscious effort into driving. We don’t drive as safely as professional drivers- some of us even talk on cellphones, eat food or apply makeup while driving-, and thereby put ourselves, other drivers and pedestrians at greater risk for our own convenience; while internally we feel perfectly secure and risk free.  

Victim

The word victim is commonly used to define a situation in which something bad happens to a person through no fault of their own. However, this kind of victim may choose to respond to that situation in with any of the four attitudes. For example, Christopher Reeves reacted like a craftsperson to the accident which left him a quadriplegic, making the best of his situation through experimentation and hard work and using his experience to help others. Here I’m using the term victim to define an attitude that underlies a range of reactions to risk and failure. The victim attitude is driven by personal failure, fear, a sense of inferiority or hatred and has a wide range of expression.

Crooks, terrorists, extremists, drinking alcoholics, drug addicts, racial and religious bigots are just some of the people operating from victim attitudes. The victim attitude looks to the past for its motivations; it embraces past failure, often measured against a mythical idealized past, as a means to an end. It totally rejects personal responsibility for such failures and thereby wraps itself in a security blanket of denial. The active victims- crooks, terrorists, extremists, bigots - use the failures of others (as they see it) to justify personal anti-social actions and are risk takers motivated by fear. The more passive victims – drinking alcoholics, smokers, drug addicts -use their conditions to solicit sympathy and support which they then use to sink lower. (See my earlier post We cannot save other Nations! We can only generate failed states.)

Don’t feel too superior to the victim attitude; we all do it… most often when it comes to politics or economics when we rail against “them” who brought about catastrophes, and “they” who owe it to us to fix things up. We learned the usefulness of this attitude at a young age, when we found that whining and crying brought us attention and comfort and there are still times when the best short term response is to call for help. However, based on what passes for opinions and commentary in newspapers and on TV, radio or the internet, most people prefer to wallow in victim mode rather than accept responsibility, roll up their sleeves and help produce solutions.

Some observations

Startup organizations, especially in newer fields, tend to be lead by adventurers trying to implement a risky but attractive future. The successful startups are usually staffed by craftspeople and have relatively few bureaucrats anywhere in the organization because its small size, lack of resources and uncertain future are self screening characteristics that make them unattractive to bureaucrats seeking risk free jobs or risk free products. A startup’s early customers are almost always adventurers and craftspeople in other organizations.

On the spectrum of attitudes I’ve found that almost all strategic thinking is done in a zone between adventurer and craftsperson. Adventurers, Bureaucrats and Victims operate on tactics; one of the reasons that they fail over the long run. Consider, for example, our discussion of torture: it is justified solely by tactics, and its defenders totally simply ignore strategic concepts such as remaining true to our principals (and the common pride in them which unifies and motivates us as Americans) or maintaining an ethical environment which makes it more difficult for extremists to recruit followers; everything is justified by the vague possibility of immediate results completely devoid of strategic concepts. The tacticians don’t argue against those strategic principles, they simply ignore them in their thinking and in their arguments.

A great tragedy of the Bush administration was its fear based tactics and a total lack of strategic thinking. It reflects the fear induced responses to 9/11 and other crises which still grip many Americans.  I could even argue that, prior to President Obama, the last Presidents to operate from strategic principals were Truman and Eisenhower; because we the electorate had become cultural bureaucrats who elected those promising instant, and personallypainless solutions- i.e. no draft, ever lower taxes. I’ll post a blog on the subject of strategy and tactics in the next month or so to explain my seemingly outlandish assertions.

As mentally healthy individuals or organizations age, their dominant mode operating tends to move from the adventurer to the bureaucrat; a process that is encouraged and facilitated by the communities in which they live.

Once an organization has had a major success its begins to attract more and more bureaucrats looking for automatic security- health benefits, retirement plans, guaranteed bonuses for showing up at work- and begins to appeal to bureaucratic customers (who incidentally represent at least 80% of the total market) who expect their suppliers to guarantee that they won’t fail. It also attracts bureaucratic investors who expect consistent growth and profits. Its leadership team begins to spend more and more time memorializing and defending its past successes-the source of the resource pool from which stability and security come- and become less and less willing to initiate changes that might diminish that past or risk the resources; they become focused on quarterly results. As a company grows and ages, bureaucratic decision makers move into leadership roles, game the organization to enhance their own welfare while innovation atrophies. The automotive and banking behemoths are merely recent, terminal examples of parasitic loads that size and age produce.

In a large, centralized, long lived bureaucratic government such as Russia’s or China’s in the 1980′s, the only successful risk takers were the criminals, adventurers and potential entrepreneurs operating outside the bureaucratic states. China had the foresight to set up special economic zones modeled on Hong Kong, which were used to self-select- people had to leave the security of families and communities and emigrate to them- to then allow them to develop as entrepreneurs in these free market zones.

In the Catholic Church the adventurers are called heretics; not a complimentary or career advancing label in that bureaucratic organization.

Notes

If the subject of how we make decisions interests you, then I wholeheartedly recommend the following book:  Influence; science and practice  by Robert B. Cialdini, Pearson Education, Inc. 5^th Edition, 2009. It’s an easy read and chock full of valuable information supported by real examples that will improve your own decision making and reduce unwanted manipulation by others.

If the issue of extremists, their motivations and how extremist movements die is of interest, then by all means read Eric Hoffer’s classic, and highly readable volume The True Believer.

Edwin Lee
June 5, 2009

http://www.dismountingourtiger.com