Introduction

A couple of weeks ago, I was having a conversation with my classmate, Ricky, at our weekly business school social. He was not feeling good about himself due to certain recent developments in his life. Ricky is in his late 20’s and has a goal to one day start his own business, preferably in the technology space. However, he is still on the job hunt like most other MBAs and is frustrated due to his lack in finding a job. One Fortune 100 company interviewed Ricky 11 times for a position, but denied him in the end.
At the social, Ricky said to me, “You know Lawrence; you have to be one of my five favorite people at Cornell.” I thanked him for the compliment, but asked him to elaborate. Ricky continued, “I appreciate that you don’t judge me like a lot of other people at the school. You are always supportive of me and my passions and I appreciate that. Right now, I feel like a loser because I had all of these big goals and dreams coming in to business school, but none of them are coming true. I feel like an even bigger loser since my wife is going to have to support me until I find a job and that sucks.”  I finally asked why he is not focusing on starting his company as it seemed to me to be the perfect time. Ricky’s response was that he was concerned about his student loan payments and lack of entrepreneurial experience.

The Bird in the Hand Complex
I have worked with Ricky on a major project before and I find him to be one of the most competent individuals that I know. He is highly capable to run and grow a successful technology company. My conversation with him led me to this question, “How can someone so smart be so nervous to take a risk that could change his life for the better if successful, but still could recover if the venture failed?”
I studied similar situations in my Applied Economic Analysis class taught by a former Lead Energy Economist at the White House. We were discussing loss aversion and the professor stated that humans were loss averse creatures. This means that we have the tendency to strongly prefer avoiding losses compared to acquiring gains, especially as a situation uncertainty level rises. This is the reason we are often content with a mediocre job that we hate instead of taking the risk to achieve greatness and to do what we love. The loss aversion mindset of thinking is standard operation procedure for living life and this needs to be changed.
I have started calling this principle of loss aversion “The Bird in the Hand Complex.” The name comes from the idiom, “A bird in the hand is worth two in the bush,” meaning that it is better to have a small actual advantage than the chance of a greater one. Is this idiom really true? Is it better to have one definite bird than to have two potential ones that you could catch? What if there is a tree full of birds and you have the capability to catch them all? This example is a representation of what most of us face when we have to make tough decisions. These irrational fears influence us to not maximize our happiness and we never reach our full potential.

Reasons for Risk Aversion
Just because there is a tendency for us to fall into the risk aversion trap, does not mean there are not things that we can do about it. The goal is for us to move from risk/loss averse to risk neutral, meaning you have a clear understanding of the risk that you take and you do not become sidetracked by irrational fear. I have identified four causes of this fear and have offered suggestion on what to do about each one.

Reason 1: Overcast Picture of Reality
Navigating through life during a difficult decision is similar to driving your care when it is dark and rainy outside. The drive is not bad if you are taking the same route daily as you have memorized where to turn by observing local landmarks, which help you reach your destination quickly. The challenge arises when you plan to venture to new destinations. Now, you need to be more focused paying close attention to street signs while blasting your windshield wipers to wipe the rain away.
When our lives are filled with overcast skies we do not have a clear view of what the future may hold. Instead of cruising on the highway of life going 65 mph, we are stuck going 30 mph on side streets. Our view is distorted by the fear of potential pain a risk may bring, but we totally ignore the consequences of inaction.
Second, we believe that there is permanent negatives effect if we make a mistake in the present. This distorted view of life events forces us to think that individual decisions are far more important than they really are, unaware that in a short period of time, what stirs us up now will not matter to us. An example of this is when I made a bad financial decision and almost lost my company in 2007. When I was going through that struggle, it seemed to me that the end of the world was near. Looking back on it now, I can only laugh at my high level of panic.

Reason 2: Meeting the Approval of Others
It amazes me how far people will go to meet the approval, opinions, and expectations of others. Similar to Ricky at the beginning of the article, most of us have changed our behaviors to fit in with others and gain acceptance. I struggled with this in middle school and high school where I did not naturally fit into the system. In 8th grade I brought home 4F’s, 1C, and an ‘A’ in P.E. (this is not a typo). Both my teachers and students perceived me as unintelligent and not capable of achieving. What then happened is that I started to believe what others were saying and conformed to their expectations. Thankfully, I had a mother who forced me to do better, but what would have happened if she wasn’t there?
We conform to the expectations of others because it is safer and more comfortable, but at the expense of being miserable and constrained with our actions and thoughts. When friends, family, and strangers tell us things, they are often projecting their fears and insecurities onto us. This can be especially harmful when others mask their insecurities and fears by giving us their “objective” opinion. As a rule, I do not listen to anyone’s opinion about my life unless I ask for it. I refuse to let unnecessary doubts into my head. Whether I pursue my dreams or not has nothing to do with what other people think is worthy. Your life is not a democracy. Everyone should not have an equal say!
How often do you shape your opinions to win the approval of others? Do you conform when people tell you that you are smart or dumb? Shy or outgoing? Affectionate or distant? Realize that our traits are fluid qualities and change depending on the context of our interactions. I considered myself shy until I ran for Student Government President back in undergrad and I was forced to present to new groups of people. I am quiet until you bring up the subject of Great Black Speakers or put me in a room with my close friends and a Red Bull. None of us are “either/or” with our traits, we are “both/and.” This realization increases your power and comfort level when you interact with others.

Reason 3: The Consequences of Circumstances and Self-Doubt
The authors of the best selling entrepreneurship book, “The Knack”, stated that “security is not the job, it is the confidence that you feel in yourself.” Lack of self confidence allows fear to take control of our minds. We apply a restraining order on our dreams and postpone them until we get that next raise, next promotion, or acquire that new skill. However, we usually have the skills and resources available to start what we are meant to do in the world. The self doubts that we face are magnified as we go through difficult circumstances. Just like Ricky, we criticize ourselves the hardest when we are at our lowest point, which is the worse time to do so.
There is one song that I cannot listen to because of the doubts they may ignite in me. It is the intro to the hit 90’s TV Sitcom “Friends”. The lyrics are:
“So no one told you life was going to be this way.
Your job’s a joke, you’re broke, you’re love life’s DOA.
It’s like you’re always stuck in second gear,
Well, it hasn’t been your day, your week, your month, or even your year.

For this to be the intro to the most popular sitcom of all time is evidence that many people feel this way about their own lives. How can one ever achieve success if they have this type of thought pattern? What’s ironic to me is that all of the main actors on that show were the highest paid in Hollywood at the time doing what they loved. Clearly, there is a mismatch here.

Reason 4: Fear of Adversity
One of my favorite movie scenes of all time comes from the movie “Notorious,” which is a biopic about the rapper Notorious B.I.G. The scene focuses on the first meeting between  future super producer, Sean “Puff Daddy” Combs and BIG. While Combs was persuading BIG to join his record label, he states to BIG, “Don’t chase the paper, chase the dream…I’m hungry; you put me naked in the jungle, I’ll come out wearing a chinchilla had and a leopard coat.” Why aren’t more people willing to have that fearless attitude? We should develop the confidence to  know that no matter what difficulties arise in our lives, we will overcome it.
Look at adversity as a normal part of life, not as something that needs to be avoided at all costs. The question is not when we are going to meet adversity, but how we will meet it. Adversity is a tool that allows the passionate to excel while everyone else falls by the wayside. Therefore, the ability to overcome adversity is an essential quality for success. When I am faced with adverse situations, my creativity is at its peak which leads to mental breakthroughs that could not have been achieved otherwise. As Paralympics medalist, Aimee Mullins, stated in her recent TED talk, “Adversity is just change that we haven’t adapted to yet.” How will you adapt to change in your life?

Steps to Move Towards Risk Neutral
I have talked quite a bit about the problem. Let’s now focus on the solution. Our goal should be to move towards being risk neutral when making decisions in our lives. Risk neutrality is viewing potential losses and potential gains equally. The reasons mentioned earlier are influential in keeping us from viewing life in a risk neutral manner, but I now want to share ways to combat the fears you may be experiencing.

Eliminate the Noise in Your Life
My undergraduate degree was electrical engineering and I remember studying signal-to-noise ratios (SNR) in class. SNR is an engineering measure to quantify how much a signal has been corrupted by noise. Each of us has our own SNR and it is hard to achieve success when there is more noise than signal. Noise can include people who are close to you constantly doubting your abilities or other distractions keeping you from reaching your full potential. Identify what these things are and eliminate them from your life immediately.
Major sources of noise for me in the early stages of Great Black Speakers were some of my friends and family members. For 9 months, I cut them out of my life as they were dampening my success signal. The challenge with family and friends is that they see you as you once were, not as you want to become for the future. Their concern and protectionist instincts raise doubts within us, which debilitates our self progress. It is not easy to eliminate the noise, but it is a necessary action.

Define the Fears Holding You Back
This next exercise is something that I learned from my favorite book, “The Four Hour Workweek” by Tim Ferris. When we define our fears, they usually become less scary to us. I define my fear when I find myself acting irrationally scared when faced with a new and daunting task. I first ask myself “What’s the worst thing that could happen?” Next, I picture in great detail all of the possible negative outcomes if I take the particular action. What I usually find is that 1) The negative consequences are short lasting and minimum while the positive consequences are long lasting and amazing. 2) The chances of the negative outcomes coming to fruition are much less than having positive outcomes.

An example of this exercise in action is when I had the goal of adding more prominent speakers to the Great Black Speakers’ roster. There were many famous people that I was initially afraid to call because of the possibility of rejection or being ignored. Once I defined my fear, I was able to make the necessary calls and drastically increased the number of prominent speakers for the company. Similar scenarios happen in my life constantly and things most often work out for the best. If things do not work out as planned, the negative effects are short lived.

Don’t Make Life Like Groundhog Day
In the early 1990’s the movie Groundhog Day was released starring comedian Bill Murray. Murray plays a weatherman who finds himself repeating the same day over and over again. After indulging in many hedonistic acts and numerous suicide attempts, Murray begins to reexamine his life and priorities. Many of us live our own Groundhog Day where the only thing to look forward to is what we did yesterday. To break this monotony, one needs to embrace the uncertainty that life may bring. We tend to focus on the negative aspects of uncertainty, but we never look at the positive things life may bring. As life brings us adversity through uncertainty, it is important to remember that adversity is what makes our life story good. I dream about how I want my life 20 years from now. If everything always turned out perfectly, I would not want to read my OWN story!

Conclusion
I know how difficult and scary it can be to take risks as all of us have to fight through that fear. However, sometimes it is better to go for the bush instead of worrying about what is currently in your hand. Courage is not the absence of fear, but overcoming it to achieve something meaningful. We all have greatness within us, the question is if we will make the decision to release it. The Bird in the Hand complex is prevalent and has become the status quo for our society. This situation is good for those who recognize what is happening because a little courage can equate into a lot of rewards in the form of happiness and wealth. As one learns how to picture reality more clearly and gains experience making risk neutral decisions, that person’s return-on-happiness (ROH) will grow by leaps and bounds.