The Ultimate Dilemma–
Imagine a burning building. As the flames climb, three individuals stand in the street wondering if everyone inside made it out safely, but with all the smoke it’s impossible to tell. The first person, unable to stand idly, rushes into the building looking for potential survivors. The second person, frozen by fear, remains in place, while the third pauses and begins searching for other ways to help.
Shortly after the first person rushes into the flames, the building collapses. A week later, in a highly public and emotional ceremony, the community praises this deceased individual as a hero, providing their spouse and children with a mayoral medal of honor.
The person who froze is deeply troubled by what they saw. On the day of the ceremony they pay respect, but leaves quickly before encountering anyone. With a heart full of regret due to inaction, deep self-loathing follows. It is likely that this event will haunt this person’s thoughts for years to come.
The third individual is troubled by memories of the scene, but does not experience the self-loathing and regret of the second. Although remaining outside instead of entering the building, they tended to the injuries of survivors and assisted the paramedics once they arrived until it was clear the situation was under control.
What the “how” were they thinking?
All three people shared the same sense of elevated urgency and the same first thought: I must help. The similarity in behavior and initial thought pattern is natural, as we know that 97% of all people will immediately react in the same fashion (the remaining 3% are considered clinical sociopaths, as discussed in our previous blog).
If all three had the same first thought, why such a variance in their actions and ramifications? The answer: the main differentiating factor is not what, but how the individuals processed the situation that makes all the difference in this circumstance.
The person who rushed in and the person who froze did not process much more after their first thought. Their innate “fight or flight” stress response caused them to act and freeze, respectively. However, what about the individual who remained outside searching for a way to help?
This person experienced the drive to help and the fear associated with running into the building, but these emotions did not bypass their ability to reason beyond the initial thought process. Instead, this individual was able to rapidly make educated inferences such as the following:
- “It’s 1:30pm on a Tuesday, there’s a low chance any unattended children are in the building.”
- “Most able bodied people likely would have found a way out already.”
- “I weigh 140 pounds. If there are any disabled people inside, my likelihood of successfully carrying them out is low.”
- “There are urgent needs outside of this building, emotionally and physically, that will help stabilize the situation.”
- “If I act completely unselfishly and risk my life, how would this loss impact my family and friends?”
This process is an internal set of calculations based on assumed probabilities. Any number of variables may have been considered and each has the possibility of being wrong. The cost of each action is weighed by these internal probabilities, which lead to the ultimate decision to not run into the building.
To say it in another way, the calculated low likelihoodof making a significant impact by rushing into the building did not justify the potential cost and collateral damage of doing so. Thus, alternative ways to respond to the crisis were explored.
Effective Executives and Their Burning Buildings
Most, if not all, executives have fought metaphorical fires within their proverbial burning buildings. In fact, Psynet Group has interviewed executives who acted heroically on their first thought, those who froze and failed to act in response to urgency, and those who calculated the likelihood of success and the possible costs and acted decisively, despite knowing their calculations could be wrong.
For example, a former hedge fund principal refused to release five underperforming sales executives, collectively costing the company over $4 million annually. As a result, he lost 75% of his book, was forced to wind down his fund, and eventually went on to work a far less lucrative job for someone else. When asked why it took so long to act, he responded simply and honestly with “I was afraid.” As the situation became more urgent, he responded less.
We’ve also assessed many executives who had the courage to go against their first thought, made decisions on costs and benefits weighed by calculated probabilities, and acted when the outcome was uncertain.
Assessing whether or not an executive will be impulsive is complicated. We ask questions about what they think will happen in the future and listen to their reasoning process. In doing so, we’re able to assess their ability to integrate probability with pros and cons. Finally, we ask an equally calculated and necessary question: “How are you preparing yourself now in light of this?”.
Ability to Reason is Not Enough
The ability to reason using probability, however, does not fully predict executive success. While maximizing the likelihood of a positive outcome, the truly successful strategic executive must consider probables and demonstrate the courage to act when there’s a chance (or even the perception) that they may be wrong.
An example of an executive who has put together the ability to reason effectively and the courage to act when the results are uncertain is the founder of a market-leading direct entertainment broadcast and satellite communication provider. During the discovery phase of our work with this top-tier Fortune 500 organization, he told a story about the first satellite they launched into space that essentially initiated the company. The founder stated that he mentally calculated that there was a high probability that the launch would fail, but allocated all of his financial resources into the endeavor anyways. To many, this decision seemed ludicrous. To a truly strategic executive, however, this was not so much a random bet as a calculated move made possible by personal and professional courage.
Although we did not formally assess his thinking, you could bet that this leader not only considered the likelihood of his success, but also considered the cost of inaction and lost opportunity. Using a rational thought process rooted in probability, he made a decision knowing that if he acted, he could likely fail but if he did not act, he was sure to fail. The founder also knew that reasonable likelihood was only a part of the decision making process, and used courage as the literal launching pad for his audacious corporate moonshot. As a result, he was the wealthiest person in Colorado on the day we met.
Summing It Up
Based on our assessment of over 1000 executives throughout the world, those who are most effective all possess the following attributes:
- They do not act on their first thought, no matter how urgent the situation may be.
- They use reason by thinking in terms of likelihood and probabilities.
- They have the courage to act even when there is a significant chance they may be wrong.
Note: How We Apply This at Psynet Group
Much of our work at Psynet Group is predicated on attempting to predict people’s future behavior. We believe this is one of the most difficult tasks to accomplish in management consulting. To increase our odds of success, we begin by gathering a set of variables and then raise or lower the known probability based on those variables.
For example (without understanding any other variables), we know that organizations have a 17% chance of hiring an “A” player. The probability of a candidate being an “A” player begins at 17% and goes up or down based on the following variables:
- Critical Thinking Test Scores
- Abstract Reasoning Scores
- Healthy Mental Models that align with the role
- Culture fit
- Emotional intelligence
- Drive and Grit
When all these variables are favorable, the probability raises to more than 90% that they will be an “A” player. If some are missing, the probability is adjusted down. Most of the candidates we recommend have an 80% to 90% chance of being an A player.
When we combine Psybil®️ online assessments and doctorally trained consultants in the assessment, the likelihood of success is 5x higher than relying on the evaluation of in house interviews alone.