How Originals Manage and Master Risk, with Adam Grant – Episode 233 of The Action Catalyst Podcast

Celebrated psychologist, author, and Professor at the University of Pennsylvania’s Wharton School, Adam Grant, explains how original thinkers balance risk like a stock portfolio, warns of becoming a prisoner of your own prototype, and talks about pouring over clown data, why your best idea is never your favorite idea, performing mental time travel, the advantages of 2nd place, and lessons from conversations with Elon Musk, Larry Page, Mark Cuban, and Jack Dorsey.

About Adam:

Adam Grant is an organizational psychologist and bestselling author who explores the science of motivation, generosity, original thinking, and rethinking. As an organizational psychologist, he is a leading expert on how we can find motivation and meaning, rethink assumptions, and live more generous and creative lives. He has been recognized as one of the world’s 10 most influential management thinkers and Fortune’s 40 under 40.

​He is the #1 New York Times bestselling author of 5 books that have sold millions of copies and been translated into 45 languages: Think Again, Give and Take, Originals, Option B, and Power Moves. His books have been named among the year’s best by Amazon, Apple, the Financial Times, and the Wall Street Journal. His viral piece on languishing was the most-read New York Times article of 2021 and the most-saved article across all platforms.

Adam hosts the TED podcasts Re:Thinking and WorkLife. His TED talks on languishing, original thinkers, and givers and takers have over 30 million views. He has received a standing ovation at TED and was voted the audience’s favorite speaker at The Nantucket Project. His speaking and consulting clients include Google, the NBA, Bridgewater, and the Gates Foundation. He writes on work and psychology for the New York Times, has served on the Defense Innovation Board at the Pentagon, has been honored as a Young Global Leader by the World Economic Forum, and has appeared on Billions. He has more than 8 million followers on social media and features new insights in his free monthly newsletter, GRANTED.

Adam was profiled in the New York Times Magazine cover story, Is giving the secret to getting ahead? He was tenured at Wharton while still in his twenties, and has received the Excellence in Teaching Award for every class that he has taught. He is the founder and host of the Authors@Wharton speaker series, and co-director of Wharton People Analytics. He curates the Next Big Idea Club along with Susan Cain, Malcolm Gladwell, and Dan Pink, handpicking two new books each quarter for subscribers and donating 100% of profits to provide books for children in under-resourced communities. He and his wife Allison have published a children’s picture book on generosity, The Gift Inside the Box. Adam is also the cofounder of Givitas, a knowledge collaboration platform that makes it easy to give and receive help in 5 minutes a day, and an angel investor in startups in HR and culture, technology, and consumer products.

Adam earned his Ph.D. in organizational psychology from the University of Michigan, completing it in less than 3 years, and his B.A. from Harvard University, magna cum laude with highest honors and Phi Beta Kappa honors. He has received awards for distinguished scholarly achievement from the Academy of Management, the American Psychological Association, and the National Science Foundation, and been recognized as one of the world’s most-cited, most prolific, and most influential researchers in business and economics. His pioneering research has increased performance and reduced burnout among engineers, teachers, and salespeople, and motivated safety behaviors among doctors, nurses, and lifeguards. He is a former magician and Junior Olympic springboard diver.

More on Adam Grant at Adamgrant.net or his podcast “WorkLife with Adam Grant”.

The Action Catalyst is presented by the Southwestern Family of Companies. With each episode, the podcast features some of the nation’s top thought leaders and experts, sharing meaningful tips and advice. Learn more at TheActionCatalyst.com, subscribe below or wherever you listen to podcasts, and be sure to leave a rating and review!

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(Transcribed using A.I. / May include errors):

Host: So excited and honored to introduce to you somebody who I really think undoubtedly is becoming recognized, very, very much recognized as one of the leading, you know, thinkers of our time. And he’s still very young. His name is Adam Grant. He’s an organizational psychologist. He’s a researcher. He’s also the number one New York Times bestselling author of a couple books. Just a great guy. I think you’re gonna be fascinated. And Adam, it’s an honor to have you. Thank you for being here.

Adam Grant: Well, thank you. That’s a pretty tall order to live up to, but I’m delighted to be here.

Host: Well, um, so just a simple question is what is an original and, and more specifically, I think, can you kind of clarify the nuance of, of what an original.

Adam Grant: well, I went in to try to study the kinds of people that we all admire for driving creativity and change in the world. That could be, you know, in the world of business. You know, I think about lots of entrepreneurs, you know, people think right away about Steve Jobs or Elon Musk. Somebody who, you know, really is disruptive, with their ability to innovate.

But I was also interested in social change. So the women’s suffrage movement, you know, sort of moving, uh, in the direction of racial equality, uh, and people who, who champion that kind of change as. And I assume that what made them different from the rest of us is that they were willing to take more risks than we were. And I was stunned to find that that’s not the case. That in fact most original thinkers don’t like taking risks anymore than you or I do. You know, they do it because a new idea is inherently uncertain and they know you have to sort of swing big if you wanna hit a home run. But they don’t enjoy it. They don’t necessarily seek out risk. And when they do take risks, they, you know, they balance them out like a little bit, like a stock portfolio. So Bill Gates is a great example. The myth of Bill Gates is that he drops out of Harvard to found Microsoft. The reality of Bill Gates is that he’s not interested in taking risks.

He wants to have a pretty predictable success. So what he does is waits till he has a year of software sales under his belt and instead of dropping out of Harvard, he actually takes a leave of absence and he has his parents’ financial support. So it’s almost like, yeah, he’s bet on a pretty unproven stock, but he has a bunch of money in some very safe mutual funds just in.

Host: Yeah. It’s like, um, it’s not so much a risk taker. As a risk mitigator.

Adam Grant: Yeah. I think that everyone has creative ideas, right? Any time you experience a moment in life where you say, you know, that doesn’t make sense, or the system is broken, or this rule is terrible, or I think I have a better way. Those are moments of creativity. Where most of us run into trouble is not because we don’t have ideas, but because we either bet on the wrong ideas or we don’t know how to get them heard and and taken seriously. And you know, you see this all the time with entrepreneurs trying to pitch their ideas with salespeople, you know, bringing great new products to the table.

And so after you have an idea, how do you gauge whether it’s any good and, you know, how do you champion it effectively? You know, we’re so close to them that that often we. Well, this is my idea. How could it not be brilliant? You know, the big problem is that that often leaders and managers are gatekeepers, and they’re almost as bad at judging ideas as we are at judging our own. But for the opposite reason, instead of being too positive, they tend to be too negative.

That happens for a couple reasons. One is that, you know, they face skewed incentives. If you’re a manager or a venture capitalist for that matter, if you bet on a bad idea, then, you know, it might embarrass you and it could even ruin your career. Whereas if you reject a good idea, most of the time no one will ever know. And so what, you know, what, what are you gonna do there? And then the other problem we see with leaders and managers, uh, or anybody with a lot of experience in the domain is that they become prisoners of their own prototypes. Where as they build up experience in a domain, they, they have a model or a template of what works, and then they compare every idea.

It’s the more likely they are to reject it. So Seinfeld gets shot down by NBC executives who say, great sitcoms have characters I can identify with. But I hate every character on this show. And they have plot lines that, you know, get resolved and all these stories go nowhere. I can’t see why we would want to bet on a show about nothing.

And it took an executive, Rick Ludwin, who didn’t even work in sitcoms. He came from the variety in specialist department to say, you’re right. But you know what? It made me laugh. And ultimately, isn’t that what a sitcom is supposed to do? And it’s often those people who have broad experience outside the domain, not just within the domain who are more able to see the possibilities and then look for reasons to say yes, as opposed to reasons to say no.

Host: Wow. So when you talk about hedging against that, that sort of confirmation bias, there’s sort of two actions you could take. There’s two things that you can do.

Adam Grant: Yeah, so the first thing is that if you can’t trust your own judgment because you’re too positive and you can’t trust necessarily your boss because they tend to be too negative, there’s a third group that that on average at least, where you get much better forecasting.

So, uh, I have a former student, Justin Berg, who studied this in the circus arts and he had people putting together news C acts that had never been seen before, and he heard people who were predicting the success of their. To leaders and managers, trying to guess which ones would be hits. And then he had this third group, which was creative peers judging each other’s performances.

And that was a group with the, with the best forecast of which acts were the most popular with customers. And I think that’s because they can say things like that act where you dress up like a clown. Don’t do that. No one likes clowns, which is actually a, a, a data point in the study. Clowns are universally hated, but your creative peers also bring something that, something in the table that the managers and leaders don’t, which is they’re really invested in seeing new ideas take off and they’re, they’re much more likely to say, that’s weird. Interesting. As opposed to, Ooh, that’s weird. And so, you know, I think you, you do wanna take your ideas to, to fellow creatives in your field, to, to give you feedback. Mm-hmm. . And then, uh, there’s some, some new evidence that I love from Justin, which says, you can also improve your own judgment. What you can do is when you come up with a bunch of ideas, rank them in order from favorite to least favorite.

So let’s say you have a dozen ideas, rank them from your, you know, your top choice to, you know, number six, to number 12. Your your what you think is your worst. And then your number one idea is not your most promising, your your best idea, which is actually your your second favorite idea. And that’s because that first idea, you’re so in love with it, that you tend to be blind to the flaws.

Whereas idea number two, you see it with a little bit more perspective. Maybe you’re more objective, but you also have enough passion to, to fix the flaws once you identified them. And so, you know, I do worry that the people game the system when they hear this and they’ll say, okay, great. So I’ll just take my favorite idea and rank it second, and then we’re all good.

Host: One of the other things related here to risk is the first mover strategy and people say, well, we have to be first to market. But your research points to something completely different.

Adam Grant: Yeah. I mean, I think there are a couple ways to tackle that. I mean, the, the thing that comes to mind for me is that one of the reasons that, that the urgency factor looms so large is that when people are, are thinking about, you know, whether to go forward with their ideas or not, they start to ask themselves, well, what will I.

And in the moment, your biggest regrets have to do with, with failure. And, you know, you, you just feel like, okay, you know, I, I don’t want to judge my reputation. And so, you know, a lot of people become afraid of failure. And I think what was so interesting is I, I, I talked to some, some really interesting original thinkers and I heard basically the same thing, uh, from a bunch of pioneers in.

So I talked to Elon Musk, to Larry Page, uh, to Mark Cuban, um, to Jack Dorsey and, and a bunch of others. And they, they basically, you know, I, I’d kind of seen them as people who weren’t afraid of failure. And every one of them said, I’m, I’m terrified of failure. Like, I, I want to be successful. I want my, you know, I wanna achieve my goals.

I wanna have an impact. And so I, you know, the idea of of failing is, you know, one of my worst nightmares. But they also said, you know, each in slightly different language, but, but hitting on the exact same theme. They also said, you know, there, there, there’s, there’s failure and then there’s, there’s a bigger kind of failure, which is a failure to try.

And they said, you know, in the short run, it, it feels like, you know, trying and failing is the worst possible outcome, but in the long run it’s, it’s actually worse to say, I never tried at all. And so the way they, they motivated themselves was to, to fast forward with a little bit of mental time travel and say 20 to 30 years down the road, looking back, what will I regret more?

You know, that, that I, I gave an idea a shot and it didn’t, it didn’t pan. Or that I never took the chance. And I think they, they intuitively understood what, what psychologists have found for years on regret, which is exactly that, that in the long run our biggest regrets are not our actions. They’re inactions, they’re the chances we didn’t take.

And remember that it’s a lot easier to, you know, to put the. The opportunity and perspective and say, you know what? I wanna be the kind of person who gives my ideas a shop. You know, we, we’ve all heard from a strategy standpoint about the first mover advantage and how, you know, you can, you can sort of become the most familiar name.

And so, you know, this is, this is like a race. And if you’re not the first, you know, to get your product out to market your. If you look at the data though, that just doesn’t hold up. . It turns out that, uh, in a study of over 500 product launches, first movers had a, a failure rate. That was, if I remember correctly, it was about six times higher, uh, than what you might think of as, as fast followers.

You know, you there, there are lots of great examples of this, right? If, if we go through tech, Apple has never been the first to market on anything they’ve created. They weren’t the first music player. They weren’t the first home computer. They weren’t the first, uh, you know, cell phone by any stretch. Uh, Facebook was following Friendster in MySpace.

Google was after a whole generation of surgeons. When you look at these, these patterns, it, it starts to click and then you can say, okay, well what, what is it about going second that actually could be an advantage? And the data suggests a few things. If you go first, you, you often have to do all this work creating a market, and once you’ve, you’ve established demand for a, uh, you make all these sort of specific investments.

And it’s very hard to pivot from those. Whereas somebody who comes in and says, wow, there’s, you know, there’s, there’s a market that’s been created there. Let improve on their technology, uh, or their idea and lemme capture that market it’s way established.

Which is they often find themselves in a position where they’ve had to sort of rush to get their product out. And so they weren’t able to do as much AB testing, they didn’t get as much feedback, uh, and they didn’t, they didn’t get to make a lot of the improvements that a fast follower can jump in and, you know, and kind of do pretty quickly.

And so I think that this is really encouraging for any of us who have an idea and, and say, well, somebody’s already done something like this. And I would say, look, to be original, you don’t have to be first, you just have to be different and better.

Host: Well buddy, I know we’re running out of time. Where do you want people to go to connect with you or if you want them to check out your books, listen to the new podcast.

Adam Grant: Well, it’s kind of you to ask Adam Grant net. I do a free monthly newsletter on work in psychology and lots of, uh, actually everything I’ve ever written, uh, is up there, uh, except of course, uh, the books, but, and then, uh, the podcast is, uh, is through Apple Podcasts or wherever you get yours. It’s called Work Life with Adam Grant.

And it’s been really fun. I’ve, uh, what I basically set out to do was, uh, instead of going to study the organizations that invite me in, I invited myself in to some of the most unconventional workplaces around. Uh, I think we can all learn from the extreme. And so, you know, if you wanna, if you wanna understand how to be more creative in a group, You should go to one of the most creative organizations on earth.

So I went into the writer’s room at the Daily Show to look at how they do group creativity. Uh, you want to, you know, if you wanna understand how to build trust, then you should go somewhere where trust is literally a matter of life and death. But I connected with a crew of astronauts, and so each episode is, is inside an unusual workplace where they mastered something that’s relevant to all of our work lives. And my hope is that there’s some interesting and useful things to take away from each episode. So that’s, uh, that’s I guess where to go.

Host: Well, we appreciate your research, so we just wanna encourage you and acknowledge all the work you’re doing, Adam, and thanks for being here, my friend.

Adam Grant: Well, that is very kind of you. Thanks for having me. This is fun. And next time I’ll get to ask you some questions.