How long should you pursue an idea or stick to a decision to prevent loss or ruin with self-imposed rules?
Photo Credit- National Geographic
There have been many books and articles on how entrepreneurs or businessmen should be the ultimate risk-takers; even compared to daredevils. Many loosely quoting Kurt Vonnegut “We have to continually be jumping off cliffs and developing our wings on the way down.” But nobody seems to be including the concept of “safety margins”
Founder, CXOs, top managements & government officials make crucial decisions every day which requires dedication & perseverance; setting courses for organizations & nations. One should be self-aware as each idea and decision impacts huge outcomes.
When a new Idea/Decision starts to take shape, there is a fine line between perseverance because you think the idea is a good one (Your Idea), and perseverance because you think the idea is a good one (The Idea)
The former is subjective and often follows personalizing previous successes. The decision is made first; with no exit strategy, you inductively seek evidence that will support the decision. Your thinking is used to defend a previously expressed opinion and to protect your ego, which is attached to that opinion.
In the latter case, you arrived at the decision deductively after examining the evidence. The decision is supported by the “thinking before acting” sequence of a plan: doing all of your homework/analysis and then, by default, arriving at a conclusion.
That being stated, there can never be a perfect plan or strategy. We are functioning in a complex system with nonlinear functions. Simply said “We are always sailing the sea of uncertainty”
Take the example of Alex Hannold, the american rock climber. He is the only human to free solo (rock climbing without ropes, harness, or any protective equipment) El Capitan, in Yosemite National Park in June 2017. It is regarded as one of the greatest athletic achievements of all time.
Notice the fact that his idea of free soloing El Capitan came in 2009 and it took him years to master and prepare the superhuman feat. He precisely rehearsed choreography of each section of El Capitan memorising thousands of intricate hand and foot sequences. He knows every millimetre of sections and practised with a rope before attempting it without.
Before his successful record attempt in 2017, Alex had tried to climb El Capitan and bailing out multiple times. After hundreds of hours of practice also, he knows when to back out when things don't turn right or the situation doesn’t allow. He would retreat back to his mobile van each day to record his training details and record every minute rock or crack on the wall in his spiral notebook. And when he climbs, he climbs with his memory.
One would argue that it is just a classic case of consistent perseverance & skills. But having time to practice and study for almost 8 years, when compared to many businesses without long runways, seems unrealistic without pivots or an overall change of plan. Alex changed his style of practice, his habits, his diet, and approach to some routes on El Capitan to achieve the feat.
Important moral here is that even though he seeks risk and adrenaline; he seeks to reduce and manage risk. He studies his Limit of liability before “it feels natural”.
In financial or Market terms, “stop-loss” means denoting or relating to an order to sell a security or commodity at a specified price in order to limit a loss.
I believe that we should have a pragmatic exit discipline — a defined set of circumstances which will cause us to determine the idea is no longer a good one because the evidence no longer supports the original decision and work on pivoting or do a fresh start.
The concept here is to prepare the parameters of deciding "stop-loss" even before we start. Or we can say rules of "Rational Perseverance". Because emotions and personalizing decisions/ideas can lead us to ruin.