part 7 of 10 of the Thriving in Uncertainty Series
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Estimated reading time: 7 minutes
Think Long-Term, Act Wisely
We all know that action is key to success. But success isn’t just about doing something—it’s about doing the right things at the right time. For financial advisors and business leaders, this means balancing the urgency to act with the wisdom of careful planning. While it’s tempting to dive headfirst into decisions, history and research show that thoughtful action, grounded in a long-term perspective, is often the path to lasting success.
Take the infamous “Cobra Effect” in colonial India. Faced with a cobra infestation in Delhi, the British colonial government decided to offer a reward for each dead cobra. The initial result? Success—people started bringing in cobras for the reward. But soon, enterprising locals realized they could breed cobras to increase their income. When the government caught on and ended the reward program, these breeders simply released the cobras, worsening the problem. This is a classic example of unintended consequences—short-term decisions creating long-term problems. It underscores the importance of thinking about how actions will impact all stakeholders over time, not just in the immediate future.
This principle applies to the business world as well. Financial decisions often focus on short-term gains, but leaders must ask themselves: What will this look like in 2 years, 5 years, or even 10 years? In today’s volatile markets, it’s easy to get caught up in immediate pressures, but leaders who succeed are those who can see beyond the present.
Consider the 2010 San José gold mine collapse in Chile. Thirty-three miners were trapped 2,300 feet underground for 17 days, with limited supplies. The initial rescue efforts were driven by urgency and media pressure, leading to risky actions that could have worsened the situation. But once the rescue team took a step back, gathered more data, and brought in expert help, their approach shifted. They worked on multiple rescue plans in parallel, balancing the need for quick action with thorough preparation. The result? All 33 miners were saved, showing the power of strategic decision-making.
On the flip side, inaction can be equally damaging. One of the biggest risks in business is the status quo bias—the tendency to stick with what’s comfortable, even when the world is changing around you. BlackBerry, once a leader in the smartphone market, clung to its focus on physical keyboards and enterprise customers even as the market shifted toward touchscreens and consumer apps. By the time BlackBerry realized the shift, it was too late, and they had lost their market dominance. In today’s fast-paced environment, refusing to change can leave you obsolete.
Actionable Insights for Advisors and Leaders
So how can you balance the need for timely action with the risk of making hasty or outdated decisions? Here are three key insights:
- Avoid Action Bias: When faced with uncertainty, there’s a natural tendency to act quickly just to feel like you’re doing something. However, rushing into decisions without enough information often leads to negative outcomes. Before taking action, ask yourself: Do I have enough data? What are the potential unintended consequences? As with the Cobra Effect, quick fixes may lead to bigger problems down the road.
- Beware of Status Quo Bias: As leaders, it’s comfortable to stick with what has worked in the past. But as the BlackBerry story shows, staying stagnant in a changing environment can be a fatal mistake. Leaders need to continually challenge their assumptions and be open to new possibilities. This doesn’t mean abandoning everything that works but being willing to adapt.
- Use Pre-Mortem Thinking: One powerful tool to avoid both action bias and status quo bias is the pre-mortem. Unlike a post-mortem, which analyzes what went wrong after the fact, a pre-mortem asks: “What could go wrong before we even start?” Imagine it’s a year from now, and your decision has failed. What caused it? By anticipating possible obstacles ahead of time, you can build contingency plans and minimize risk.
In leadership and financial advisory, thinking through your decisions in advance is key to success. Imagine if BlackBerry had asked, What if touchscreens and consumer apps really take off? What would happen to our business? They could have hedged their bets by investing in new technologies while continuing to serve their enterprise customers. Instead, they stuck with the status quo until it was too late.
Small Wins, Big Progress
One reason we fall into the status quo is the fear of the unknown. But you don’t need to solve everything at once. Break big challenges into smaller steps. Focus on small wins. In the 1970s, the Pittsburgh Steelers became NFL champions by mastering the fundamentals. While they only won half of their games against stronger teams, they consistently beat weaker opponents by focusing on the small, simple things—blocking, tackling, executing plays. It wasn’t glamorous, but it worked.
I experienced this firsthand while climbing Mount Kilimanjaro. As we started our summit attempt at midnight, the goal seemed far off, and the path ahead was dark. But every step, lit only by our headlamps, gave us a bit more visibility. We couldn’t see the top, but every small win—every foot climbed—brought us closer to our goal. That’s how progress works in business too: each small step forward adds up over time, providing more data, more opportunities, and more momentum.
Yes, the world moves fast. And yes, it can be frustrating to not see immediate results. But sometimes, slow and steady progress is what wins in the end.
Call to Action
What about you? How do you balance the need to act with the risk of acting too soon? How do you avoid getting stuck in the status quo?
Next edition
Stay tuned for the next edition: “Navigate—Course-Corrections in an Unpredictable World.”
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