The question refers to an individual’s win/loss record at their company. So for you, in your company, is it better to have five wins and no losses, or to have twenty four wins at the cost of losing four times?
Your answer says a lot about your company’s culture, your position in the enterprise and the confidence you have in your future.
It says a lot about how our brains work – yes our brains. In the upcoming book How We Decide, Jonah Lehrer discusses brain research that points to our minds having a “loss frame” where we see potential losses, as having greater impact than potential gains. Researchers, according to Lehrer, attribute the strong value placed on avoiding loss to connections between our emotion and rational mind. The book does the topic justice, but to summarize, we do not like the way we feel when we lose, so we seek to mitigate loss even when the rational points to strong potential for gain.
This is interesting because it is better to create a net 20 wins than 5, even if those realizing those wins require some temporary setbacks. This is a rational view to the question and assumes that wins and losses are roughly equal in their consequences.
The rational mind is more accepting of risk than the emotional one. Conventional wisdom holds that it’s the other way around.
The question is important because in today’s economy it is all too easy to be ruled by emotion and the sentiment of the crowd. Things are bad because everyone says they are, the media piling on bad news about the economy, the future, etc. It is important to remember that good news and success rarely sells newspapers, captures media attention or makes the T.V. Pieces of good news, even not-bad news, are discounted, discarded or rejected.
In today’s economy, we all face the need to make tough choices for which there are no simple answers. Leadership is about making those choices and understanding that we all take risks. Leaders think beyond the ‘loss frame’ to what is really going on and act.
Success in this environment recognizes that there will be mistakes; you will lose periodically, but you and your organization are ahead when you create more wins than losses. So you need to rationally look at things, analyze the options and make decisions rather than giving in to fear of failure. Me, I would take 24 and 4 any day; heck, I’d even take 7 and 2 over never failing, or not acting in the two situations where I wound up losing.
Inaction, based on the need to be perfect, is just about the worst thing you can do in this economy. Why? Because while you are out there doing nothing, your competitors are acting, learning and winning more often than losing. They are getting smarter and better while you are standing still.
Remember what Geddy Lee from the Canadian Rock band RUSH said in their song Freewill, “If you choose not to decide you still have made a choice!”
Choose rationally; recognize the emotions tied with anxiety over failure. I know that you will win more than you lose. So best wishes for the choices you have to make in 2009