While Decembers (that’s December in plural form) are often for reflection, Januarys are for new beginnings.  Then there’s spring, take April – April showers bring May flowers? April, the start of Q2. Flowers might be the theme for spring, right? Yeah, April isn’t really known for anything in particular except for maybe, depending on where you live, the potential that spring could (should?) be coming – so could an unexpected snowstorm. It’s now September and last week was HOT, like summer hot. Isn’t fall supposed to be coming? School has started and it isn’t supposed to feel this (sticky) anymore. Thus, perhaps the theme for September is anxious anticipation or uncertainty or both? Uncertainty often makes us anxious, but we seldom stop to consider explicitly how much attention deserves to be paid to various uncertainties, unknowns, or sources of risk. I mean, does it really matter? In our context, “it” is probably a question or a decision. Does “it” really matter? Well, of course, it depends on what “it” is.

Collectively, we worry about risk – this is risky, that is too risky, and “Oh, that’s risky!” We tend to fixate on the downsides of uncertainty; we worry about the downside risk, but very seldom about the upside. Take the chance of winning the lotto, for example. I mean, chances are you won’t win the lotto, and chances are you won’t get eaten by a shark either, but you probably worry more about the shark and allocate relatively little worry to the potential that you win the lotto.  (If you want to argue about the actual probabilities behind the lotto versus shark example, we’ve tackled that seemingly logical but ultimately flawed argument in a previous letter.)

But when does it really matter? Well, it probably really matters when the outcome could be really bad. Admittedly, this is why it makes sense to worry about being eaten more than you worry about winning the lottery. In one case, you end up shark food (bad outcome); in the other, you are likely on a road to personal ruin as most lottery winners are. However, you aren’t immediately eaten, and you live on to play the odds again. So, bad is worse than good, and really bad is probably even worse than bad. Overall, the severity of the punishment (scale of loss, perhaps) probably does impact whether this really matters. If you stand to lose $1.00 if this goes poorly, it probably isn’t that big of a deal. But, if you stand to lose $10,000, well the stakes are quite (literally) higher. There are a variety of other factors one might want to consider in addition to the scale of what’s at stake to lose …

  • How sticky is this decision? If you do this and it turns out poorly, how easy (or hard) is this to reverse? If you build a building and it’s in the wrong spot, well that’s pretty sticky. (Quite literally in the sense that it is stuck to the ground in the wrong spot.)
  • How frequent is this decision? Is this a big strategic direction of your life or business question; are we talking a once-in-a-lifetime sort of thing? Or are you going to get the chance to repeat this decision over and over, thus adapting and making different choices if this one goes poorly? I mean, are you getting married here or are you picking out yogurt on your weekly shopping trip?

There will always be questions for which there are no answers (or for which no answers are really necessary); this I am certain will never change. Thus, we must try to remember to focus our energy, efforts, and resources on answering the questions that will truly make an impact instead of questions such as oh, I don’t know…say, “Why is a raven like a writing desk?”  Recall, a raven is actually not like a writing desk, and it doesn’t matter why.

Perhaps what truly matters, and therefore deserves of our time and attention, is what actually matters more than what we decide to do about it? Is the real secret to success is figuring out what matters are most deserving of our time, attention, and resources? If so, maybe it is much less about the answer and much more about the question. Yet we spend so little time coming up with questions and so much time searching for answers … to questions we have not yet defined.

ConsumerCorner.2023.Letter.19