curbing catfights part 2: existential risk and existential rationale
generated w/ Midjourney. prompt: ragdoll cat in business suit wearing glasses, romare bearden, orange and green
The only situation where you have eliminated all risk is the one where you’re done. Dead. Dissolved.
In all other scenarios, you and your team face some risk.
Debates between leaders about the dread “strategy” often collapse or grind to a stop over different attitudes toward risk. In my experience, the founder/CEO has a larger risk appetite than her COO / CFO / General Counsel.
Given that there will be risk until your organization is done for, I have found it helpful to keep a couple things in mind:
The question is not “do we do something risky or not?” - if you’re doing anything at all, it carries some measure of risk. The question is, “is the risk we’re considering worthwhile?” (with a bonus question for advanced players - “how confident are we of our appraisal of the risk?”)
To help answer question 1, ask: What is the reason this team exists in the first place? What is our “existential rationale”? Y’know. Your raison d’etre. (Or, if you absolutely must, your “why”)
When friends and I were scaling a COVID-19 response start-up in 2020, we quickly experienced several phases of a successful start-up’s life cycle. In the span of 6 months, we ran out of seed money and nearly had to fold, then redefined our offering and found product-market fit, then started to grow like crazy (from our original trusty crew of 5 teammates to several hundred and later over 1,000). All of that was happening with COVID testing as our core service.
Our mission, though, was to get people safely back into community with one another. We all knew vaccination was the only way that could happen. Tests were necessary but not sufficient. We couldn’t achieve our mission with tests alone.
We unfortunately faced two ugly facts:
We had no experience with vaccine delivery or operations
We had no contracts to deliver this very costly service
The practical, legal, and financial risks of going all in on vaccination were high. They were arguably existential. If we were bad at this and hurt someone - we were done for. If we were very good at it but didn’t get a paying public partner to support us - we’d bankrupt ourselves. Also done for.
We decided to go for it, committing as much cash, time, and personnel to it as possible.
Getting people out of the pandemic was the reason we existed in the first place. Running an existential risk was worthwhile; it was the right move. Running that risk was the only way we could realize our existential rationale.
…
This is not an argument that you should bet the farm at every opportunity. Different sectors and different organizations have different risk profiles. When you have daily responsibility for protecting a precious resource (think nuclear reactors or preschools), there are certain risks you’ll never run.
In many, maybe most, organizations, you’re in a world of smaller, safer bets. It’s helpful to bring discipline, honesty, and growth mindset to your betting - and to explicitly teach your people and talk with your fellow leaders about decision-making in this way.
There is no risk-free nirvana where you can’t possibly get sued, or see great teammates quit, or pay a painful opportunity cost. So don’t do catfights about missing out on risk-free nirvana. Talk instead about a) what is at risk and b) how likely it is that running the risk lets you realize the core reason you and your people are here in the first place, doing stuff with each other instead of your families.
-Eric
