Our Abridged Philosophy of Risk-Taking
The Stanford Encyclopedia of Philosophy defines risk in five different dimensions (1):
- An unwanted event which may or may not occur.
- The cause of an unwanted event which may or may not occur.
- The probability of an unwanted event which may or may not occur.
- The statistical expectation value of an unwanted event which may or may not occur.
- The fact that a decision is made under conditions of known probabilities (“decision under risk” as opposed to “decision under uncertainty”)
Sometimes unwanted potential outcomes are well known, and we don’t appreciate the consequences: If a tightrope walker performs without a net, the risk is clear. In broad terms, this level of risk is associated with final, absolute failure. While we have to accept the possibility of catastrophic failure in every endeavor, its likelihood can be mitigated through preparation, collaboration, and persistence.
In practical application, the, may or may not occur, part, or, uncertainty, is where the discomfort lies. When success becomes more narrowly defined, and more critical to achieve, uncertainty becomes an increasing threat. Although uncertainty is associated with risk, the two are not equivalent (2): If one is unknowingly disarming a dummy bomb, she is uncertain of the level of danger it poses, but she is not at risk. Uncertainty, therefore, can often be overcome through investigation and rational thought (3).
Since negative outcomes will always be possible, and since knowing precisely how events will unfold will always be impossible, risk and uncertainty are unavoidable. Critical to the mission of The Art of Risk-Taking is understanding not only how creative problem solving can be utilized to cope with these phenomena, but, further, how the process is actually made more effective because of them.
The Relationship Between Risk and Creativity
Fundamental to some schools of thought is the notion that creativity is not only a response to the stressors and dangers of an imperfect world, but that intellectual progress, and the necessary transcendence of our work, are actually reliant upon, and made stronger by difficulties and individual suffering (4). Whether this way of thinking is provable or not, creativity is an effective and valuable tool for navigating humanity’s biggest problems, and the risks and uncertainties inherent in them (5).
In considering how risk affects creativity, making comparisons to the economics of cognitive effort may provide insights into when and why we choose to apply our energies to solve problems. Memory and cognitive control, two facets of effort, are all but essential for achieving goals and optimizing performance. Their use, however, comes at a high computational expense, and, to compensate, we tend toward conserving them in many tasks, sometimes even to cumulatively negative end results. This creates a paradox that can be explained by considering that, when we allocate our precious cognitive resources into any single task, we are simultaneously precluding all opportunities to achieve goals by other available means. Distraction, therefore, is a functional adaptation that helps us mitigate the risk of missing more direct routes to success (6). Creative processes that optimize goal selection might also reduce the felt risks of certain opportunity costs that affect our expenditure of creative effort.
The nuanced relationship between creativity and risk is further stratified in the juxtaposition of risk-acceptance and risk-imposition (7). The products of high level creative enterprise are, to varying degrees, uncertain, and therein lies their value. If they were formulaic or readily synthesized, they would be trivial, and unworthy of pursuit. That uncertainty, and the risk that it tows, are, more-or-less, easily accepted by the creator; as that particular landscape of experimentation and ideation is familiar territory, and the consequences of misadventure in it are relatively slight. It’s the original owner of the problem, however, who will most likely face the consequences of uncertainty on a long time scale for any individual solution, and upon whom the risk inherent in that must ultimately be imposed. This observation identifies a need for cultivating empathy within creative processes, and trust within working relationships.
Teams, Subjective Value, and Motivation
Since effort is costly, we tend to reserve it unless we perceive that we will be adequately rewarded. Risk-taking and creativity each have measurable effects on how people decide to invest themselves in their work, and the impact that their compensation has on that investment. When confronted with the risk of having to exert a high amount of cognitive effort to accomplish a task, people will typically choose a safer route (8). In correlation, when performing heuristic tasks, though there is a threshold of reward that must be met to achieve a necessary level of personal motivation, there is also a ceiling to that motivation, however, beyond which extrinsic incentives such as financial compensation are far less effective than intrinsic ones (9). Since complex, functional creative solutions are difficult to frame from the outset, the risk that they will require increased effort expenditure is relatively high, and, in turn, so is the threshold for reward necessary to motivate their creators. Conversely, creativity carries with it its own degree of intrinsic motivation, which potentially opens the door to striking a balance of rewards.
Among the catalogue of intrinsically motivating factors is trust, which is reliant, in part, on the competence of one’s team and leadership (9). Effortful tasks become more costly with age. Even when older people and younger people perform equally well on a given task, older people are more likely to devalue rewards as the risk of potential demands to achieve them increase (6). This raises interesting questions about how experience relates to success, in so far as more experienced team members may seek more conceptually driven and constraint-circumventing, and less cognitively labor intensive solutions than their less experienced counterparts. This ability may be one of many paradigms of leadership that demonstrate competence in creative problem solving, and bolster trust among collaborators.
Sources (that you probably won’t read)