Skin in the Game

Gandalf_Great Power

Most of us live lives constantly on the go, with little-to-no-time for testing hypotheses or even formulating them, and experimentation becomes something that occurs by chance.

The quest for predictable outcomes blinds us from the reality that business and most specifically commerce is about risk creation. Our conversations often suffer from a lack of appreciation for the micro-trade offs that are constantly necessary to make something work.

Translating to layman terms: we idolize the macro-bulshitters and trivialize the people who adapt, iterate, and do what it takes to make it happen. Yet it is the process of learning by example that nets results.

A thought-provoking concept put forth by Nassim Nicholas Taleb in Antifragile:

“We can simplify the relationships between fragility, errors, and antifragility as follows.

When you are fragile, you depend on things following the exact planned course, with as little deviation as possible—for deviations are more harmful than helpful.

This is why the fragile needs to be very predictive in its approach, and, conversely, predictive systems cause fragility.

When you want deviations, and you don’t care about the possible dispersion of outcomes that the future can bring, since most will be helpful, you are antifragile.

Further, the random element in trial and error is not quite random, if it is carried out rationally, using error as a source of information.

If every trial provides you with information about what does not work, you start zooming in on a solution—so every attempt becomes more valuable, more like an expense than an error.

And of course you make discoveries along the way.”

Two applications of this concept:

  1. we need to learn to engage with and understand variance, as Tim Kastelle explains
  2. making connections is about putting skin in the game and learning to appreciate differences as sources of valuable information



Valeria is an experienced listener. She designs service and product experiences to help businesses rediscover the value of promises and its effects on relationships and culture. She is also frequent speaker at conferences and companies on a variety of topics. Book her to speak here.


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