Have you ever feared change that may be what you needed? Have you wondered why people would do that? This past week I spotted a pattern in a few conversations in which I engaged that went something like this:
- Mark: What we are doing is not working and we won’t achieve our objective
- Jen: What could be causing that?
- Mark: I’ve looked into that already. It’s X, because of A causing B rationale.
- Jen: I see. I guess we would have to try changing from doing X to doing Y.
- Mark: We cannot do that, that change would be too disruptive!
How fascinating we can take a conservative stance when proposed to try something, knowing what we are doing today will not produce the result we want, even when we are able to diagnose the cause ourselves and to identify a change that has the potential to help us achieve that result.
I have been on both sides of the conversation and I feel I understand the emotional charge present on both sides of it. Of course each one of us will be more often in one side or another depending on our personality and circumstances. The relevance of both factors is made evident when we realize the same person is more likely to value an investment upside risk more than the downside risk at a time in their life when they perceive their financial situation to be safe than when they don’t; and also that not every person in the same financial situation will choose to make the investment in the same percentage of cases.
Could this be another manifestation of the asymmetry with which we perceive upside and downside risks? We are more worried of loosing something we have, as in making a bad situation worse, than excited for a possible win, the opportunity of making things better associated with changing. Even having set a goal that we are going to miss does not seem to incline the balance towards valuing the opportunity more than we fear the downside risk. We seem to show some natural risk aversion in such scenarios.
Another possible factor at play is the ambiguity aversion. Changing means having to enter unknown territory and face the possibility of an uncertain outcome. Under some circumstances, different for each one of us but existing for all or at least most of us, we would rather take our well known but not so good actual situation than embracing the unknown to try and get to a better place.
When facing a decision that involves change and both upside and downside risk it is advisable to stop and explore one’s emotions and other available information. The quick heuristic codified into our instinctive reaction and so helpful when the downside risk is lethal or catastrophic may not be the most appropriate when nobody is going to die and nothing will be destroyed forever.
The Adaptive Executive 