Shaping the New Alternatives

November 9, 2011 Leave a comment

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|Photo by AnneMarie Laureys|http://www.flickr.com/photos/45358908@N06/4168069265/in/photostream|

A few months ago I posted a piece entitled “Negativity and Self-Limiting Advocacy,” which seemed to get a lot of play in the 2.0 sphere.  The gist of the entry was that negative mindsets limit our view of possibilities and can wall us off into tried and not so trustworthy ways of being and doing on the social change front.  John Hagel, author of The Power of Pull, posted the entry below on his Edge Perspective site this week, which extends this conversation to thinking about how our responses to the prevalent uncertainty surrounding us have a lot to say about our future economic and ecological well-being. I really appreciate his focus on narrative, especially on the heels of attending New Ventures West’s introductory course on integral coaching, and I am excited to think more about how we can co-create new and liberating narratives and “platforms” that bring into being the regenerative future that is waiting to emerge more fully.  I would also add to Hagel’s assessment at the end by suggesting that beyond young people, there is much hope and wisdom to be found in those who have been most marginalized by the dominant culture and yet have found ways to walk in and hold onto two worlds, to survive and to thrive.  And to take note of and learn from the wisdom of life.

Cognitive Biases in Times of Uncertainty

We live in a world of increasing pressure and uncertainty, driven in large part by digital technology infrastructures. These marvelous infrastructures bring us unprecedented connectivity and opportunities to better ourselves.

That is a core paradox of our life in the 21st century: our new infrastructures create both opportunity and pressure. The pressure comes from intensifying competition as people previously marginalized in our global economy master these infrastructures and compete for jobs and markets that were previously secure franchises. More importantly, the pressure also comes as those in the core of our economy cling to practices and institutions that were designed for another world and struggle to remain successful in a world that requires new practices and institutions. The turmoil we see around the world today is a vivid illustration of this paradox.

What’s our reaction to this?  I fear that we’re increasingly heading down a path that we tread at our peril, not just for ourselves as individuals but for societies around the world.

Risk/reward perceptions

How did we get on this path?  It’s actually quite understandable, driven by a very natural reaction to uncertainty.  In times of high uncertainty, we all have a natural tendency to magnify risk and discount reward. We clearly see all the things that could go wrong and tend to focus on those. Sure, there may be rewards down the road, but those diminish in importance in light of all the risks along the way.

Time horizons shrink – the rise of the short-term

What’s the consequence of this risk/reward bias?  We dramatically shorten our time horizons. We don’t spend a lot of time thinking about the long-term because that’s so uncertain and fraught with risk. Instead, our attention shifts to what we can get today.

This has all kinds of consequences. We see it play out on Wall Street as investors focus on short-term returns, often measured in milliseconds in the case of the growing reliance on high frequency trading.  We also see it in the growth of financial derivatives – if it takes time to produce new assets, then the best route to economic gain is to find ways to derive additional value from existing assets and trade those values instead.

We see it manifest in increasing corruption around the world where long-term progress is sacrificed for payments into secret bank accounts today. We see it unfold in the form of increasing debt at the individual, institutional and government levels, dramatically amplified by concerted government policies around the world to keep interest rates artificially low. We see it take shape in the form of environmental degradation where we focus on near-term economic returns, even at the expense of long-term degradation of the world we live in.

The spread of zero sum mindsets

But it gets even worse.  As we shorten our time horizons, we become prisoners of a zero sum mindset. If we only focus on the short-term, we must accept things as they are.  There’s a given set of economic value – it’s a fixed amount. If we only have a fixed amount of economic value, then we start to focus on who will get what share of the pie.  If you get a larger share, then by definition I’ll get a smaller share.  You win, I lose. If I win, well then you must lose.

Creating new economic value takes time and requires a longer-term horizon. A positive sum view of the world, one where we can increase overall value by working together, only becomes viable if there’s time. And time becomes much too uncertain when risk and return perceptions magnify risk and discount returns.

Here’s the really bad part. This zero sum mindset folds back on our perception of risk and reward and the shortening of our time horizons.  If there are only a fixed set of rewards, then we must move quickly to grab our share. We have no time to lose. Our time horizons become even shorter.

The rise of threat based narratives

But, there’s more.  Zero sum mindsets naturally lead us to focus on threat, rather than opportunity. If there’s only a fixed set of resources and rewards, there’s limited upside. Our attention shifts to protecting what we already have, however little it might be.  In a zero sum world, we are constantly vulnerable to the efforts of others to grab our share of the pie.

Threat based narratives take root – enemies are gathering force and intent on destroying or appropriating what we have. We need to be vigilant and band together to protect our interests.  A quick look at the political narratives dominating the discourse in the US – whether on the Right or the Left – reveals the growing prevalence of threat based narratives.  Threat based narratives lead to polarization – if you’re not with us, then you must be against us.

Threat based narratives again have a pernicious effect – they reinforce our tendency to focus on the short-term.  They lead us to further magnify risk and discount potential rewards. The threat is imminent – we must focus on protecting ourselves now from the enemies gathering force.  We can’t afford to be diverted by longer-term issues – the battle is here and now. If we don’t win today, we will have no tomorrow.

Threat based narratives lead to a further consequence. They motivate us to seek out those who agree with us.  We can’t tolerate divergent views when we are under attack.  We must all come together under the same banner.  Uniformity of thought and perspective is highly valued and rewarded. This pressure to conform reduces the potential for creative thinking and new ideas which further reinforces our sense that we live in a static world with a given set of resources and wealth. The passion of the explorer gives way to the passion of the true believer. Once again, we find reinforcement for a short-term mindset.

Trust also suffers. In a world defined by threats with the prospect of attacks coming at any moment, we must be extremely careful about whom we trust. Threats can be used to build solidarity, but they also prompt us to be continually looking over our shoulder. Even if someone seems like our friend today, they could turn on us tomorrow. We must be on our guard at all times.

This becomes an ugly world, trapped in a vicious cycle. Short-term mindsets drive zero sum mindsets which drive threat based narratives which reinforce short-term mindsets.  Yet, it’s a world that we increasingly find ourselves living in.

Crafting an alternative path

What is to be done? As a long-term optimist, I believe that this vicious cycle can and must be broken. Curiously, the best way to break it isn’t to challenge it head on, but to understand it, as difficult as that might be.  If we give it prominence as a threat and define ourselves in opposition to it, then paradoxically we become prisoners of the same kind of threat based narratives that are gripping more and more of the world.

Understanding it means accepting that this vicious cycle is triggered by a completely natural and understandable set of cognitive biases. These biases come into play in response to growing pressure and uncertainty.  Our challenge is to find ways to address and shift these cognitive biases, starting with the most basic one of magnifying risk and discounting rewards when faced with growing pressure and uncertainty.

Without going into great detail here, I’ll suggest that three elements can come together to help overcome these cognitive biases – narratives, platforms and people.

Narratives shape perceptions in powerful ways.  Opportunity based narratives have the potential to flip our natural risk/reward perceptions. Rather than magnifying risk and discounting rewards, opportunity based narratives help to make long-term rewards more tangible. As a result, they magnify our perception of the likelihood of those rewards while discounting the potential risks that might arise along the way in our quest to achieve those rewards.  Well constructed narratives create a sense of inevitability by focusing on the fundamental forces that are shaping the opportunity.  At the same time, narratives, in contrast to stories, invite participation and contributions by others to achieve the opportunities.

Think of the narrative that led to the growth of the United States.  America was viewed as a land of unlimited opportunity. This perception motivated people to leave comfortable surroundings and make very dangerous journeys to a new land that presented enormous challenges in the short-term.

Fast forward to today. The rise of global digital technology infrastructures provides the foundation for some extraordinary opportunities for all of us to connect and create together in ways that were simply not feasible in the past.

But narratives alone are not sufficient. No matter how compelling they might be, if the day to day reality in the short-term doesn’t in any way  reflect the potential outlined in the narrative, people will have a hard time embracing the narrative.

This leads to the need for platforms to alter the short-term economics of effort and reward. Platforms create rapid positive feedback loops to build credibility for the longer-term opportunities down the road.

In the case of the United States, transportation infrastructures, cheap land and rapidly growing cities with ample opportunities for small merchants and entrepreneurs provided examples of the platforms reinforcing the longer-term narrative of a land of opportunity.

Digital technology infrastructures provide the potential for very powerful platforms today, but the key is to find creative ways to make these platforms accessible in a meaningful way to broader segments of the global population and to reduce the effort required to use these platforms to generate near-term rewards. One promising example is the use of mobile technology to help impoverished farmers in remote rural areas of Africa and other developing regions access more information about ways to increase the value of their crops.

There’s a third element that has to come into play – people.  That means us. We each need to find ways to provide compelling models through our own actions to demonstrate the opportunities that can be unleashed on these platforms.  We can provide a proliferation of stories that reinforce and amplify the broader narrative. The most effective way to do this is to connect with a passion within us that will help us to turn pressure into opportunity and stress into excitement. With this passion we are motivated to embark on quests to achieve our potential more fully, in part by connecting with others that share our passion. As Gandhi once famously said, we must live the change that we wish to see in the world around us.

Who will be most likely to carve out this alternative path?  Look for the segment of the population that is most hurt by the spread of short-term zero sum mindsets. As I’ve suggested elsewhere, my bet is that it’s the younger generation that have the most to gain from a long-term view that emphasizes the opportunity to achieve more of their potential. It’s not an accident that the Middle East, a region having one of the youngest demographics in the world, emerged as an early source of opposition to regimes driven by a short-term view of the world.

We all need to resist the natural urge to magnify risk and discount rewards.   By connecting with the passion of the explorer, we’ll be much more likely to succeed in overcoming the cognitive biases that paralyze others. We live in a world of unprecedented opportunity and unparalleled challenge – our actions individually and collectively will determine whether opportunity or challenge prevails.

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