You are in a savannah forest, enjoying a cool evening. Just a few steps away, you see the grass in front of you shaking; you suspect that it could be a lion. Dr Neil de Grasse Tyson in his book, Starry Messenger: Cosmic Perspectives on Civilization conceives a hungry lion algorithm:
- You decide to check if it is a lion causing the grass to move. Indeed it was a lion and a hungry one. You will be dead.
- You check if the breeze is shaking the grass. It really turns out to be a breeze. If you continue the behaviour you will eventually die.
- You think there is a lion in the grass. So you run and survive.
- You think it is a lion and you run, but it is just the breeze causing the grass to shake. However, you still survive.
Behavioural science experts and neuroscientists keep repeating that we react the same way our ancestors did half a million years ago, trusting our primal instincts more than anything else.
In other words, when we encounter an angry superior or a problematic situation, we behave the way our ancestors behaved when they saw a lion. We run away to save ourselves.
Are we inevitably hardwired to react with only primal instincts?
Experts urge people to pause, question and react appropriately to the danger in front of them instead of letting the reptilian parts of their brains react.
After all, no matter how dangerous your boss is, she can’t kill you. The same is true for most such situations.
Ways to mitigate risks
Large organisations, financial institutions and software companies have risk mitigation experts who help senior management teams understand the risk and rewards of various options, say pursuing certain customers or a particular product line. They even buy insurance covers to mitigate risks against losses. These save the organisations from the ‘hungry lions’.
However, for individuals, making choices is not easy. Wrong relationships, career and investment choices can have lifelong repercussions.
If one wants to leave a high-paying corporate job and begin a startup, the ‘grass’ in this case is satisfaction and success. The lion could be the statistic that 90% of startups across the world fail.
When you face the lion, you have only one life. But the modern man’s savannah jungle — his life and career — is generous, like a video game. Each game offers a limited number of lives. And often, your age decides how many lives you have.
For example, investment gurus ask you not to make risky investments as you grow old. In other words, don’t even check the grass, just run away from risks. Also, people take lesser risks when they grow old. For instance, you won’t find people in their fifties who have invested in cryptocurrency.
An age for taking risks
Chinese Billionaire Jack Ma advised youngsters in their twenties and forties to make varied career choices and try entrepreneurial skills. You can use the multiple chances life provides you. If you are in your fifties, he advises mentoring youngsters so that they can check the ‘grass’. On a lighter note, the recommendation is probably asking you to watch gladiatorial sports rather than be a gladiator.
When will you check the grass and take risks? When do you run away from the lion and survive another day?
Everyone has low, high or moderate risk appetite, which could be different for different aspects of life. Someone could be hesitant to trek up a hill fearing a fall but could have invested a large share of his earnings in cryptocurrency.
Single-instance bias
It is important to understand whether the risk appetite has been formed by a single-instance bias. It makes you form opinions based on a single event in your life or the lives of others.
There are people who stayed away from the stock market after losing money during the 2008 financial meltdown. At work, someone could be hesitant to give ideas because their colleague’s ideas were criticised by top management. A critical examination of this bias could help you decide if the risk is real or perceived.
The consequence of the risk
Every action has intended and unintended consequences. If the consequences of your action are those that can last for a long time, you need to evaluate your action closely to see the possibility of unintended consequences that may have skipped your attention.
If your actions can be perceived by people as risky, then you would do better to avoid them. If you are an investment banker, try to avoid being seen at the race course or the casino.
The example of the person in the jungle talks only about the man in his natural state. The modern man in such a situation can arm himself with a gun or a tranquiliser and mitigate his risks. The point: One needs to be, and can be, prepared and have options.
(The author is a management consultant)