“When you ain't got nothin', you got nothin' to lose” (Bob Dylan)
Organizations are designed to maintain their equilibrium. Our culture, customs and rituals are used to underscore our continuity and to eliminate the wild variation that is the human condition. From our socialization in schools to our sacred sacraments in church, we are perpetually anchoring our beliefs to the norms of our community. While these mechanisms provide an essential function for a lawful civilization, they inadvertently reduce the novelty that produces social progress and personal growth.
We seldom change on our own. That’s because we enjoy the rewards of consistency which brings little risk when times are good. However, when times are bad, risk and reward are reversed and there is more to gain from change and less to lose from the status quo. Anyone who has ever attended an Alcoholics Anonymous meeting will attest to this tried and true axiom as new members are initiated with stories from recovering members about how their marriages and businesses failed as a result of their addiction. They don’t go easy on the novices because they understand until they own up to the reality of their situation, there is little hope of them kicking the habit.
The same is true for mature organizations which seldom innovate or grow significantly when things are going according to plan. This is why start-up companies typically assume more risk and grow at much faster rates, or fail more frequently, than more established incumbents. These new companies lack the resources to compete on the same scale so their only available option is to differentiate themselves by trying new things. A cursory look at history shows that most revolutions start on the outside of a community where the dispossessed have little to lose and much to gain and work their way into the middle where the establishment tries to hold sway. Both good and bad, the change comes in a pincer maneuver from the outside in. From Ghandi to Castro, “grow or die” is the mantra.
We experience these same dynamics as individuals. Divorce, bankruptcy and lose of health drive us into changes we previously believed unimaginable. We change, and hopefully grow, when our life sucks. Conversely, we also change when our life exceeds our expectations. That is, when we are on a roll. Graduation, gainful employment, true love and the birth of child bring rewards with the change. This is often called risk capital. We are more likely to take the risk of trying radical new things when everything is going our way. That’s one reason the rich get richer—they can afford to take chances. Anyone who has been in love knows this feeling of invincibility. As the saying goes, “love conquers all.”
We try new stuff when our life is out of specification both good and bad. Ironically, we mostly try to grow when our life is in the comfort zone, the one place designed to ensure that we don’t change. Transformation starts at the outside edges of our lives and works its way back to the middle where it is sustained as the new normal.
- Our greatest opportunities for growth happen where risk and reward are reversed
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