Excerpt from My Daily Thought Bomb Emails:
“Courage is when you sacrifice your own well being for the sake of the survival of a layer higher than yours.”
– Nassim Nicholas Taleb
Yesterday I sat in a meeting with two partners that are killing it in a vicious industry trying to work out the next steps for their company. They had two seemingly diametrically opposed views as to the most efficient path forward or the best next steps.
On one hand, they could pursue a huge opportunity in Florida. Low hanging fruit, ripe for the picking and already in motion. On the other, they could NOT pursue the opportunity in Florida and focus on what they are doing now.
Each partner was on a different side of the argument and each had an argument that would be true under a certain set of circumstances.
It would be easy to think that one was coming from a place of “abundance” or “courage” and the other from a place of scarcity. But I disagree. Vehemently.
This is the kind of stuff that most partners can’t navigate effectively because they don’t have the tools to identify WHICH set of circumstances is true. One believes great entrepreneurs take risks, the other believes that great entrepreneurs hedge the downside.
Both are correct. And ee figured out the most efficient path forward in about 15 minutes. I’ll break it down for you shortly, but first….
Nassim Taleb sampled ninety people in one of his seminars and asked them “What’s the worst thing that could happen to you?” Eighty-eight people answered “my death”
This can only be the worst case for a true psychopath.
For then, he asked those who deemed the worst case being their own death: “Is your death, plus that of your children, nephews, cousins, dogs, sats, parakeet and hamster worse than just your own death?”
Invariably, the answer was yes.
“Is your death plus your nephews, cousins, dogs, cats, and the rest of all of humanity worse than just your death?” Yes, of course. Then your death is not the worst possible outcome.
So… we understand that individual ruin is not a tragic as a universal or collective one. Your death is not the worst-case scenario unless it correlates to the destruction of everything else.
Why all this death talk?
Because it brings home the fact that if we don’t prioritize like rational people, instead of psychopaths, we make stupid decisions. And to call risks “courageous” without context is juvenile, at best.
Here’s is Taleb’s Hierarchy of risks:
Risks at lower levels to preserve higher levels are courageous and prudent. To risk higher levels to preserve lower levels is cowardly, selfish, and shortsighted. Said another way: to risk yourself for the betterment of the whole is courage. To risk the whole for your own gains is cowardness.
So what does this mean for our two friends trying to figure out the most efficient path forward?
Here’s my Hierarchy of Personal Risk:
To risk your core priorities and/or number one priority (what you want most) to preserve or carry out your short term impulses is childish and dangerous. To risk what you want right now (impulse) to preserve what you want most is courageous and prudent.
Taking a risk is only an act of courage if one is risking a lower lever to preserve a high level. Otherwise, it’s just foolishness.
Even the eccentric billionaire that is known as a “risk-taker” is taking risks at lower levels to preserve the higher levels of their personal hierarchy; giving up what they want now for what they want most.
Back to our friends and turning this into a solvable problem. Here’s what we did:
- Gut checked priorities. We had an open conversation about the pyramid – what matters MOST? Listed them and ranked ordered the REAL worst case scenarios, not the psychopathic ones. The very top priority was something we will call Project X.
- Determined at what point the Florida project would put Project X at risk because taking a risk at a higher level to serve a lower level is NOT courage, it’s stupidity.
- Agreed upon and set a stop loss so that the Florida project gets abandoned well before it poses a risk to Project X.
We were able, in just a few minutes, to make sure priorities are still the same and then craft a plan to pursue short term impulses to the extent that they do NOT put higher-level priorities at risk.
They now know what to do, when to stop doing it, and how to make the decision. In other words, they know exactly how much risk they can take without it being stupid.
Here’s the lesson:
- Should you take on a specific risk or not?
- Should you try and balance multiple things?
- What is the best next step?
- How do you know when to push harder and when to move on?
It depends. The same action, given the framework above, can be a smart, courageous, and necessary move for one person; stupid, petty, and wrong move for another.
This is why I have been on a tear talking about and sharing the Certainty App.
It basically does all this work for you: crafts a custom/personal definition of wealth based on your core priorities, preference priorities and maps out the most efficient steps to where you want to be based on your current position.
You can an entire year of access with the link below. I happen to know all of the updates coming and that, if you get in now, you will get all the upcoming updates and features for free.
Of course, for it to work you have to be honest with yourself about what matters most to you. If you’re not ready to do that, head back to Facebook for your daily dose of dopamine.
Otherwise, snag the app. Over the next of weeks, I’ll be showing you some really cool ways to use it for yourself and your clients 😉
Ps. If you have a hard time “quantifying” results to clients, I’m going to show Certainty App users and coaches how to immediately solve that problem. Here is the link to get in again: