The Chris Voss Show - The Chris Voss Show Podcast – You Are What You Risk: The New Art and Science of Navigating an Uncertain World by Michele Wucker

Episode Date: August 3, 2021

You Are What You Risk: The New Art and Science of Navigating an Uncertain World by Michele Wucker The #1 international bestselling author of The Gray Rhino offers a bold new framework for understanding and re-shaping our relationship with risk and uncertainty to live more productive and successful lives. What drives a sixty-four-year-old woman to hurl herself over Niagara Falls in a barrel? Why do we often create bigger risks than the risks we try to avoid? Why are corporate boards newly worried about risky personal behavior by CEOs? Why are some nations quicker than others to recognize and manage risks like pandemics, technological change, and climate crisis? The answers define each person, organization, and society as distinctively as a fingerprint. Understanding the often-surprising origins of these risk fingerprints can open your eyes, inspire new habits, catalyze innovation and creativity, improve teamwork, and provide a beacon in a world that seems suddenly more uncertain than ever. How you see risk and what you do about it depend on your personality and experiences. How you make these cost-benefit calculations depend on your culture, your values, the people in the room, and even unexpected things like what you’ve eaten recently, the temperature, the music playing, or the fragrance in the air. Being alert to these often-unconscious influences will help you to seize opportunity and avoid danger. You Are What You Risk is a clarion call for an entirely new conversation about our relationship with risk and uncertainty. In this ground-breaking, accessible and eminently timely book, Michele Wucker examines why it’s so important to understand your risk fingerprint and how to make your risk relationship work better in business, life, and the world. Drawing on compelling risk stories around the world and weaving in economics, anthropology, sociology, and psychology research, Wucker bridges the divide between professional and lay risk conversations. She challenges stereotypes about risk attitudes, re-frames how gender and risk are related, and shines new light on generational differences. She shows how the new science of “risk personality” is re-shaping business and finance, how healthy risk ecosystems support economies and societies, and why embracing risk empathy can resolve conflicts. Wucker shares insights, practical tools, and proven strategies that will help you to understand what makes you who you are –and, in turn, to make better choices, both big and small.

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. Get ready, get ready, strap yourself in. Keep your hands, arms and legs inside the vehicle at all times. Because you're about to go on a monster education roller coaster with your brain now here's your host chris voss hi folks this is voss here from the chris voss show.com the chris voss show.com hey we're coming with another great podcast we certainly appreciate you tuning in thanks for being here be sure to please please refer this friends neighbors relatives everyone to the show.

Tell them, hey, have you subscribed to The Chris Voss Show? It's something you go on iTunes or other places to subscribe to. And there's a rumor that it might be the fountain of youth, that it will make you younger, better looking, or at least improve the quality of your skin. I can't fully confirm that because the lawyers won't let me. But do you want to take the risk? Seriously, think about it. Why risk it? Speaking of risk, we have a great author on the show that risk is in their title. So see what I did there subconsciously, not even paying attention to what I was doing, but I did it. Anyway, these are the funny, stupid stuff we do at the show to make it

interesting, but go to youtube.com, 4Chess Chris Voss. That's not the funny part. Hit that subscribe button, bell notifications, all the notifications of everything we do. Go to goodreads.com, 4chesschrisvoss. Let's see what we're up to over there. Also go to all the groups we have on Facebook, LinkedIn, Twitter, Instagram, TikTok, all those places them kids are at, those derned kids on my lawn. We go over there and post all this stuff. You can see some of the fun things we do over there. Anyway, guys, today we have an amazing guest on this show. She has written the book, You Are What You Risk. See, risk was in the title there. The New Art and Science of Navigating an Uncertain World. Today, she's on the show. Welcome to the show, Michelle Wooker. So, Michelle, welcome to the show. Congratulations on the book. Just came out April 6, 2021. So this is hot off the presses.

Give us your plug so people can find you on the interwebs. Thanks. You can find my website at thegrayrhino.com or wooker.com, W-U-C-K-E-R.com. I'm also on Twitter, at Wooker. The great thing about having a lousy last name is it's really easy to remember. There you go. There you go. What motivated you to write this book? In fact,

if you want to quote the number of other books, you have a few others too. Sure. This is really a spinoff of my third book, which is called The Gray Rhino, How to Recognize and Act on the Obvious Dangers We Ignore. And that's really, The Gray Rhino is a metaphor for the big scary thing that's coming at you. It's really big, like a rhino. It's got the horn. It's coming at you. And it's gray because if you went to the zoo when you were in the sixth grade, like I did, you probably saw a black rhino and you probably thought, wait a minute, that's not black. That's gray. And similar with the white rhino, not white, gray. It's obvious this big two-ton thing is gray, but the color is really a reminder for how much more

obvious we are and how much more likely we are than we think to take our eyes off of the obvious thing. It's a call for a fresh look at obvious risks, probable big scary things that are going to happen to us. And it's a framework for helping get past that and being one of the people who gets out of the way or even uses its strength instead of the ones who gets trampled. So I was going all around the world on a book tour and people kept coming up to me and asking afterwards, how do I apply this to my personal life? Or they just told me, this is how I applied it to my personal life. And I didn't know what to do with it because I write about policy and business and finance and geeky wonky stuff. But I realized that so many CEOs were having terrible problems with bad personal risk decisions and boards were starting to kick them out. I started to see such a clear connection

between the risk attitudes of the people who are making decisions and the people all around them and the very different risk policies and frameworks in different countries. And all of that comes together to shape why and how we make the decisions that we do about risk. Each one of us makes 35,000 decisions a day, and each one of them is, in essence, a risk. And I really saw that the risks that we take define us to the world as distinctively as a fingerprint imprinted on a wine glass at a crime scene. The detective brushes that black powder on it and they know who you are. And so the risks we take tell the world who we are. and whorls, those shapes that you can't change, the experiences, the cut your finger, it leaves a scar, that's indelible, the environment, the temperature, the people around you, even the food

you're eating, all of these things affect all of the risks that you take, all of the choices that you make. But most of the time, we don't think about that. And so this is really a way to help people focus on who they are by thinking about the risks that they take. So is that a good arcing overview, description of the book, or do you want to expand? I think that's really the central premise. And in fact, it's why you can see it behind me, the cover image, there's a fingerprint in the shape of a maze, which really symbolizes to me risk-taking choices, but a lot of uncertainty you don't really know. And this seems to be the moment for thinking about uncertainty, everything we've gone through over the last year. But it goes into each individual,

but then how there's a feedback loop between your risk behaviors and choices, the organization you work for, your community, your country, and how decisions at all of those levels change the risk decisions that we make. Whether you go to the grocery store wearing a mask or not, whether you get a vaccination or not. We think about risk a lot these days for the obvious reason. And by understanding those influences and the changes that you can make, different habits, different processes, understanding, being aware of your own risk fingerprint and that of the people around you, it opens up a whole new world. You can make better decisions about your life, about your job, about your community,

where you want to live, what you want to do. And it really provides a beacon through this very difficult time that we're dealing with, where there's a lot of uncertainty, a lot of choices come up. And as we're seeing with the number of people quitting their jobs or making other big choices, it's really a pivotal time for each one of us and for the world. And so I want people to think about the risks that we're taking and why, what the consequences are, and how we can be better at taking risks, both the good ones, the opportunities, and hopefully fewer of the bad ones, the dangers, the ill-considered risks. This is really interesting. I've been writing about this in my book, starting a business and stuff. And let me know if this is the same sort of thing.

By the way, 35,000 risks or decisions a day. I need to go take a nap. I'm tired already. I know. I'm exhausted already, right? Wow. 35,000. I'm going to wake up tomorrow morning and be like, one. Open your eyes or not. Walk the dog or make a wave. 35,000 more of these to go, for the love of God. Make it stop. Thankfully, I guess some of that's subconscious, but we used to have a thing that I started early on in our business because we were a startup that was self-funded, lots of sweat equity, but we grew exponentially very fast because we weren't in a lot of debt and we could reinvest our profits, which is what we did rather than buying fast cars for the first, I don't know,

five, 10, eight years, maybe eight, seven years, something like that, maybe five, 97. Yeah, it'd be five. So one of the things we do is we'd have to make technical, expensive investments in our business. And for a long time, we just had cheap printers and cheap copiers, little ones. We're a mortgage business and we're getting that point where we're getting a lot of mortgages and there's a lot of paperwork and there's a lot of copies. You have to make three copies of each one, one for yourself, two for the lender. And the lender sends one off to a portfolio. And I remember the first time, this was like a really big deal. It seems silly to think about now, but I remember it was like $4,000 for this copier. And, and it was like, gosh, this is all big spend it. Can we get,

is this going to be on ROI for us and stuff? And $4,000 that we were still starting up is a lot of money for this big computer. And we're trying to make that leap where we weren't just buying the next thing up we were trying to reach out grab something that would last for a year or two in the future and and i came with this concept of looking the dragon in the teeth looking the dragon in the mouth and analyzing all the shit that could go wrong like everything that like what if this doesn't work can we live with this can we live with that can we live with all the different aspects that could go wrong. Like everything that like, what if this doesn't work? Can we live with this? Can we live with that? Can we live with all the different aspects that could go wrong if we overspent for this thing and wasted the money? And by doing that, I use that model through the rest of my business and my CEO toolbox, looking at the dragon and the teeth. And that's what we'd always do. I'd bring up, let's look at the dragon, the teeth. What

do we got here? Give me a list of things that are stupid about this idea. And so is that a bit like what you've done with the rhino where you're looking at the hazard or is it not? It's a little bit. And one of the points that I make with the rhino is that the big thing coming at you can be a danger or it can be an opportunity. And one of the things that my friends started sending me cute baby rhino videos. They're cute. They are ridiculously cute. Even with the rhinos themselves in Africa, obviously they at one point were dangerous to villages and things. They came through and trampled it.

But on the other hand, like they create a lot of tourism revenue and having gone on safari to research for my book completely legitimately, I was just amazed. Just like the power of being around these animals is incredible. Then I sort of feel a little bit guilty about describing them as the scary thing because we're actually more dangerous to rhinos than they are to us. But I think it really makes a lot of sense on the small day-to-day things or the bigger things. What's the

thing that's coming at me? And of course, when you're making an investment, it's also what if I don't invest? The thing coming at me is like all the energy that I'm wasting because I haven't made the investment that I need. But looking at the dragon and the teeth is a really great image too. And to me, that seems like risk awareness. People are different. There are some people who just, they don't want to hear it. They don't like the solution. They just don't like thinking about risk at all. And they're like, la, la, la, la, la. Don't talk to me about it. Same as people who don't pay attention to gray rhinos, but people who are aware of the risks, the things that could be wrong and who are aware of what they're willing to lose or whatnot. And that choice sometimes really says who you are, that I'm willing to let

this thing go, but not that. I'm willing to let my career go, but not my health. Because if I let my health go, then my career is shot to hell anyway. So that ability to really face up to some of the risks, look at what could go wrong or not, and analyze it is such a powerful tool. And risk, a lot of people think of it as, here's the risk, we're going to compare this risk or that risk, and here are the probabilities. It's actually not a set in stone sort of thing. That the very act of looking at the dragon's teeth, being aware of what might happen, thinking about it, coming up with a plan, actually reduces the risk. First of all, that the thing might happen, that the tooth might come at

you. Or if it does, that you'll get gored. It gives you a way to reduce the risk when you've got a plan. If something bad happens, if you stick to that plan and change it, of course, as you need. But if you have an idea of what you might do, just like a firefighter, you're going into fire, they've practiced all the things that they might possibly do, that actually reduces the risk itself. So by being aware of the risks around you, of how you respond, of the things that you can do to reduce those risks, whether it's, you know, having a rainy day fund, or having the right advisors around you, or tracking what's going on, those actually reduce the risks in front of you. So by paying more attention to a risk, by being more sensitive to it, you're not just

a scaredy cat. You're actually doing something really sensible. Yeah. I'm going to have to ask my military friend. I think there's a military term for it, but the Pentagon or the military will do the same sort of thing. They'll map out, okay, if we make this decision, what are the elements of risk? What are the variations of things that can happen? And how do we address those if needed? Or are they something to pull back the decision from? And to me, that just makes more

sense because what you just said, you can, if those teeth do come up or the rhino and whatever comes at you, you can go, okay, we plan for this. We know what to do. And we can take a little bit of the hit. We can take a little bit of the bite. And I honestly, within, I think, two months of buying that thing, it paid for itself and we needed to actually buy a second one. We were growing so fast. And that became the next problem. I mean, when you have businesses or you're making personal life decisions, some are big and scary. Should I buy the mortgage with a big house? That's a big decision.

Should I buy the expensive car? Should I have kids? Should I get married? Should I get divorced? These are things where, you know, hopefully people put some thought into them and analyze the risk factors and stuff. So it's great you talk about this in the book. There's the beginning of the book or the beginning, at least, on Amazon.

What drives a 64-year-old woman to hurl herself over Niagara Falls in a barrel? If you want to tell us more about that, isn't it connected to how bad the dating world is today? You have a point. But of course, online dating hadn't started yet, so the risks were lower than they are now. She probably got on Tinder and went, hell with this, I'm going over. But yeah, I was looking for a way to start the book and was scrambling, hamster running the wheel. What do I do? So I went to a dinner party.

It was a Christmas dinner party. And these guys had just come back from Niagara Falls and they were telling me about Annie Edson Taylor, who was, she's actually 63 years old. On her 64th birthday, she became the first person to go over Niagara Falls in a barrel. It was a souped up pickle barrel. And it's like a crazy thing. But her story is really a lot about what my argument is that what you do is a combination of the world around you. It was a very turbulent

time. The president had recently been assassinated. The economy and markets were up and down. There was a lot of uncertainty around your past experiences. Her father had died when she was younger. Her husband had died. So she'd have these shocks that if some people have a shock and they can get, they go, okay, I can go through that. I can get through anything. And other people shut down. And that's the intersection of your experiences and your innate personality. And she was an adventurous person. She had traveled all around the States to Mexico, teaching all over the place. So she was used to different circumstances. She'd had a financial cushion most of her life. And some of the research shows that people who take the biggest

risks seen from other people are the ones who either have nothing to lose or who have a cushion. But her cushion was nearing the end. She some money fast and so she had this great idea that she was going to go over the the falls in a barrel and she also was very methodical like a lot of the people we think of as big risk takers they go and they study everything she had this leather straps and padding and she sent her poor cat over in the barrel first there's conflicting reports over whether the cat survived or not but there is a picture of the cat on top of the barrel, which I hope was taken after that happened. But she tested it and she hired this promoter. She had to say she's got this speaking career.

And she made two really big mistakes. The first one was to not think about the fact she wasn't nearly as dynamic a speaker as she was a false jumper. In fact, by all accounts, she was actually pretty boring, which is hard to picture someone who does that. You're friends that are that way though. So. It's, yeah, who knows? They're still getting speaker gigs. I don't know. I don't know. But the other thing, this is actually really funny. So she'd hired this

carnival promoter guy and they lied about her age. They said that she was 46 and not 64. And that turned out to be a crucial mistake on two counts. First of all, he apparently stole the pickle barrel. And he toured the country with the pickle barrel, and a woman who said that she was the same age that they'd lied that Annie Anson Taylor was. And so she did not make a ton of money. She eked out the end of her life selling souvenirs and autographs and stuff at the foot of Niagara Falls. And it was sad. But it just, it was such an amazing feat.

And other people tried it after her and not all of them made it. But she was really a combination of her innate personality, her experiences, her financial circumstances, the zeitgeist, all of these things worked together to that risk decision, which is to say that any of the decisions that any of us make are completely tied to what's going on around us. So if we're aware of how our environment is shaping our risk decisions, we can at least make better decisions or do what we need to do to change our circumstances so that we can make different choices that we're happier with. And it's cool that she logically went through the risks and factors and assembled different ways to mitigate the risk. But there's, for a lot of people, the risk factorization is

just, hold my beer, watch this. Yeah. It's interesting with her. And I'll tell you, I interviewed a couple of extreme athletes in the book too. And from the outside, we're like, oh, they're so daring. They're so adventurous And she did something that created a lot of blowback, but also a lot of praise. And I'm very proud of what she did. And so sometimes it's a matter of asking yourself, okay, riskier than what? She bringing up that top. And I do want to say this about, I think the story is more interesting that she was a 64 year old woman. think that sells better yes that's ultimate freaking that's that's better than a 47 year old that's 60 64 you're back in those days now you're at the end yeah and maybe that's not your decision anyways like if i don't make it well i didn't have that much much left in me anyway yeah but just pulling just pulling that off, like I'm 53.

I'd be too chicken to pull that one off. And here's the thing. That's like back in those days, that was like going to space. You're going to get free beers for a lot. Heck, if I saw that on a girl's Tinder profile, I'd be asking her out just to find out more. Just think, what if they had online dating way back when? It would have changed the course of history. I don't know.

I get this girl on date and she went over to Niagara Falls, man. That's probably a keeper right there. Or it's a massive red flag. But I'm going to find out because I just got to know. She's a unicorn of either brilliance or crazy. So I don't know. It might be fun. Anyway, jokes aside.

You bring up Simone Biles. And I've been arguing with a couple of people the last few days and been disappointed, and I don't know if I'm on the right or wrong of this, but I'm on the side I think that you were on that you stated. I was watching her land and stuff, and I'm like, she's going to twist an ankle and mess herself up. That's the best-case scenario. Yeah, and she didn't go off like John McEnroe, who is always like, she didn't go off like that.

She just said, hey, man, my head's not in the right place. And there were some people we talked about in Clubhouse that have worked with Olympians and stuff, and they were disappointed. And I was like, hey, man, if she, like you said, if she can break her neck or if she can hurt herself or do a permanent injury or something that takes her out of the game for years on end, there's a point where you've got to, even a leader knows that. There's a point where you have to step back and let your team take over that's trained. Maybe they won't do the job as good as you would. But there's a point sometimes where you have to say, I need to take myself out of the game and put the people in the game. And there's a reason for that. There's sometimes I don't know about.

I'd have to go study this, but there were probably times where Michael Jordan said, I've got to I've got to sit down for it. I've got to sit out around her. And so I respect what she did, unless she was acting like John McEnroe and like I'm being a spoiled brat. That's not her style. That's not her style. That's not her style. And when you know the power of this girl and you've been following for as many years as we all have with her viral videos, there's something really going on that's really bugging her. And then there's a lot of different factors with a woman that can happen, a lot of balance of different chemicals and stuff. And I've had days where I wake up and everything I touch is just collapses, falls over.

I'm just like a bull in a China shop. I write emails to people. I'm like, why are you so hateful? And I'm just destroying everything. And I just, it's, I just have to realize I woke up under a bad mood or I got off really literally on the wrong side of the bed, if that can happen. And I just need to give up on today and, or at least this part of today. And I need to go back to bed and re-wake up on the right side of bed somehow, however that works. And then there's just some days you have like that, where you're just like, it doesn't matter how good you are. You just, you're just whiffing every ball that's coming across the plate and you just have to step back

and go, what's it, what's going on? It's such a smart strategy. And actually that whole chapter on the neurobiology of risk choices, and it's such a smart strategy. And actually, I've got a whole chapter on the neurobiology of risk choices. And it's such a great risk strategy. If you have to make a choice, pay attention to your environment. There's some research showing that if it's colder in the room, people are likely to take bigger risks than if it's warmer. If you eat spicy food, you're going to be more comfortable with risks for a few hours afterwards. Yeah. Whether or not you like spicy food or not. And it actually gets into a lot of really interesting things. you're going to be more comfortable with risks for a few hours afterwards. You know, yeah.

Like whether or not you like spicy food or not. And it actually gets into a lot of really interesting things. There's stereotypes about people who like spicy food, and there's actually probably something to that. But I also spoke with a trading coach who talks about using biofeedback to look at stress indicators and heart rate variability and also those things. And if you're feeling physically stressed and you're, for example, a trader, put the mouse down, shut off the screen, go take a walk, do what you need to do to be physically in the state that you need to be

to make good decisions. And that's just, it's so important. And frankly, a lot of people, when they're stressed, like their trades are going wrong, they're going to pile on more and more bad risk decisions, unless they know that about themselves. Hey, put yourself in a good position. Someone else I talked to about, he's like, what's the color of the room, the lighting, the mood, the environment, those things all put you in a good place or a bad place. And by being aware of it, you're making a good risk decision. That is adjust for the bad things and make sure you get in a good place before you make that choice. So can we say that she's making a good risk decision based upon your research and knowledge? Because I've had people have been like,

they act like the owner. She's our Olympian. She shouldn't be this way. And you're like, she could break her neck and then she's never going to be your Olympian. She shouldn't be this way. And you're like, she could break her neck and then she's never going to be your Olympian. Yeah. These are people who haven't done fraction of it. You know, you know, it kills me. Actually,

there was a lot of debate over the, the, your Trenko flip. So she's been doing things where they were like, weren't giving her extra points for that because they didn't, they didn't want to encourage other women to do it because they didn't have the chops and they didn't want other people to get hurt. She's like Michael Jordan. She's like at a level that is just freak show.

So these people criticizing her can go stuff it. Yeah. It's like what they used to say when I used to come up with ideas at the car dealership back in the day. They were funny. You go up to the management and you say, yeah, you know what you guys should do? You should stop doing this and do this. And they would look at us and be like, you know what you should do? It took $2 million this and do this. And they would look at us and be like, you know what you should do? It took $2 million to start this company. So why don't you go get $2 million and you can do whatever the hell you want

until then shut up. So maybe we should just be saying to the Biles people like, hey, why don't you go do that vaulting crap and let's see how well you do and see if you have a bad day there, buddy. I'm with you on that with one caveat, which is that sometimes people can get so set in their way of doing things that they don't get enough outside perspectives. And of

course, an uninformed Yahe coming in and telling you what to do, that's one thing. But I think she talked to her doctor. She probably talked to people who were part of her almost personal board of directors, which is a concept I love. But it's also important if you're a tight knit group and you all do things the same way and you learned each other rhythms and you've done things, then it actually is really important and a good risk mitigation strategy to bring in someone with an outside perspective that you trust to say, hey, have you thought about doing it this way? You're making a million dollars this way, but you can make $2 million a year if you did it that way. It helps you to see

an opportunity or to see a threat or a risk that you're missing. So it's very important. And startups, I think there's a chapter interviewed actually throughout the book, a lot of interviews with entrepreneurs. And there are a lot of stereotypes about entrepreneurs as though they're big risk takers. But you look at the research on it, and it shows that they actually perceive the risks as being very different from other people. And so you have this, there's the risk perception, and then there's the actual risk or the risk appetite. And so you can have two people who are making the exact same risk decision. I'm going to invest $10,000 in this Robinhood stock, but it's not the same decision if you have a million dollars in assets and you're just putting $10,000 there versus if you have $11,000

worth of assets and you're putting all of it there. So the same risk decision can be very different. And another factor that shapes how risky something is in this bigger picture, defining risk, is how much information you have. And you've done it. Entrepreneurs do their homework. They ask people for their... The good ones. Yeah. And the ones that succeed, those are the ones we hear about. The ones who crash and burn, thankfully. Maybe we should hear more about those as cautionary tales. But entrepreneurs tend to go and they do their information. And they also ask themselves, not just is this big risk worth taking, but what risks am I not taking? And you see right now,

there are a lot of solopreneurs, freelancers, a growing part of the workforce. And the surveys of those people say, they're like, I want to have diverse income streams. I want to have control over it. I don't want to be subject to the whims of a bunch of control freaks who can't make up their mind, who are above me and who I have a good relationship with my boss. And then they go to another job and the person who comes in is a nightmare. And so a lot of the solopreneurs and the small business owners are doing what they're doing because they actually see that as less risky than the jobs that certainly when I was growing up, people thought were less risky, quote unquote, which is working for a big corporation and having a good pension and insurance and a company car and all of that. Yeah, I love what you've put down there because I can attest that it's true. One of my stories, I studied a lot of entrepreneurs because we started buying out,

giving out loans and buying out white knighting businesses and companies. And so it got me intimately knowing how other entrepreneurs work that were failing. 99% of entrepreneurs fail in the first two years. And so most of the businesses that needed money and that we were trying to buy entrepreneurs who had never risked getting out of their original model. They had a model when they started their business. Sometimes it worked initially and then it changed. The environment changed, the business, whatever.

There was some sort of change that took place. The model stopped working and they couldn't, or they just start with the model and they had a pile of money and they just burned through it. And so what I found was nine times out of 10, the entrepreneurs were failing, heading to bankruptcy court, which ultimately did go to bankruptcy. They would grab onto that model and they would ride that sucker right into the ground and they would never switch. And, but for me, I'm always changing, switching, taking risks. Like you say, successful entrepreneurs were, we take risks, but we take calculator risks. We know what's going on. We've looked at the dragon.

And so what was interesting was, like I said, those guys wouldn't take the risk to switch their models like you talk about. They wouldn't risk it. They'd just be like, this is the way it has to be. This is the way we've always done it. And then they would be in bankruptcy court. That's true. That's the most dangerous phrase ever is the way we've always done it. And so it's interesting that I have subtitles about the new art and science of navigating an uncertain world. And the relationship between risk and uncertainty is so powerful. And these guys wouldn't make changes. They're of course taking a big risk by not making changes. And I think that they were afraid to take the risk of trying something new

because they were afraid of the uncertainty that came with it. And part of being an entrepreneur, being the boss is that you've got a certain amount of control. And control is good up to a certain point. But at some point, you need to know when letting go of some of the control. I mean, like Simone Biles, again, is the better strategy. And what's interesting is that in this sort of classical economics, risk and uncertainty are two very different things. This idea of risk as defined by Frank Knight is that it's an uncertainty that you can quantify, which is a bit of an oxymoron given that an uncertainty is defined as something you can't quantify. You have actuarial tables, you could say a 78-year-old man who smokes is 60% likely to live X number of years.

And there are some things, weather maps, there are some things that you can estimate the probability within a reasonable set of parameters. There are other things, say, credit ratings on subprime mortgages, those investment grade ratings that didn't work out so well. I think that sometimes we'll assign these probabilities wanting to be certain, and we forget that those probabilities are not as certain as we like. And that brings risk a lot closer to uncertainty. And in daily life, a lot of times if you talk to someone about risk-taking, the subject is really that it's about uncertainty. It's about allowing yourself to

enter into a more uncertain place. And the question, this comes back to control is if you are choosing to go into uncertainty with a clear path through it, or if it just happens to you, you know, the last year and a half, for example, we've had a lot of uncertainty that, that most people have felt very little control over. And I think a lot of people's responses have not necessarily been to the calculated risk of getting COVID or dying from it, but rather how much control they think they have, how effective the things that they do can be. And there's some research showing that people who heard messaging that here are simple things, easy things you can do every day by yourself that are effective in

protecting you and your loved ones. Those are the ones who are more likely to put on the mask and take the vaccine and do social distancing and all of those other things. And other people, even if they thought the risk of getting the virus and dying from it was much higher, if they weren't getting that messaging, or if they didn't somehow come to that conclusion on their own, are not going to do it. And frankly, for some people, the not wearing a mask is a way of saying, I'm in charge. I don't need no stinking virus. Even though it's not the best risk mitigation strategy, it's the best way of feeling in control. So understanding how you feel about control and information and uncertainty is a very important part of understanding your

risk fingerprint. Plus understanding that it's a feeling and not logic is important as well. I've been through periods of my life and my business where as the captain of the ship, we'd be in the stormy seas and I would, I would be like, Hey, we're melting down this model. We're burning the bridges, boats behind us. And we're going that away. And there's land ho there, but we can't see it. We don't know it's there. I have a model, I have a vision. And you take people in the reality distortion field and your team looks at you and goes, holy crap, he's like serious. Like he wants to blow up the model and go different. And he wants

to go that way. And it was only my record of being this home run kid or everything for the first three or four or five companies. I'd smack them out of the park and turn them profitable really quickly. And to me, it was just a widget model that I just replicate. My brain comes up with systems that are really interesting. And I'd look at things from a very simple out-of-the-box format. But I would be the guy who would be like... And what they didn't see was there was modeling and risk modeling that I'd done in my head. There was an understanding of where I was going.

There was a projection that I had made of the bet that I was taking. And I just didn't take people on risk. There's also a bit of bravery or courage to it because at one point I had over 100 employees under my stead. You make a wrong decision, you're going to cost people jobs, livelihood, and everything else. There's a bit of tight, high wire rope to it where you're just like, whatever. But I've been that guy who goes, here it is, and everyone needs to lash themselves to the sails, and we're going to get through the storm. We're going to get through the thing that wants to sink the boat, and we're going to find peaceful waters, and we're going to get through the thing that wants to sink the boat and we're going to find peaceful waters and we're going to find land. And people just go, he's done this before.

Flash yourself to the sail. Let's go. But it's hard. It's hard as an entrepreneur, but I never had to file bankruptcy and I made companies and we usually bought companies that were coming into bankruptcy or going into bankruptcy. So anyway, those are some of my thoughts. And just saying that you've nailed it. Thank you. I think so much of this is about business and entrepreneurship, but it's also about the future of work, whether you're going to take a traditional job or do something else.

And I think the risk skills of the future really involve not just whether to take this risk or that risk, but to be comfortable with uncertainty, to know what the best environment is, whether you really want to work at one of those legacy firms where we've always done things that way, whether you're more comfortable with a startup. And there's no ideal answer. I think it's understanding who you are and what the best fit is for you. And if you're going to do something that's not quite the best fit, what else can you do in your life to make yourself more comfortable? And I think about risk as really a portfolio of things across your life, your health, your relationships, your safety when you're doing fun things like

base jumping, not me, you're never going to find that. I'm an entrepreneur. I've made big investments in education. I've done things like that. And ethical risks, there's all sorts of risks in your life. If you go back and you look and say, okay, where am I comfortable taking more risks? And where is my behavior closer to my comfort level? And where could I be taking more good risks, pursuing more opportunities, thinking better, stretching farther, reaching out? What do I need to do in the other parts of my life to make me more comfortable going out on a limb where the potential upside is there? But also that if I fail, that's going to be a pretty big fall too, but I know I can get through it. And so if you think about risk as this portfolio across

different parts of your life, you can set up things that make you feel safer in some areas and not as much in others. Just like they tell you, just like your financial advisor tells you, some stocks, some bonds, a little bit this, there, some alternative and wacky investments if you really want to do it, but make sure it's nothing more than you can afford. That's really important. What other aspects of your book haven't we touched on that we can tease out? I think another part is really the policy environment. And I try to keep the policy part small because this book really is for everyone. It's not just for policy people like some of my older books, although they weren't just for policy

people. They actually made things much more accessible. But it was really interesting. I was in Milwaukee. I was giving a talk and there was a nurse in the audience who was talking about, at the time, there's a big debate over Obamacare, whether they're going to get rid of it or not. And she said that she was getting a lot of people coming in with stress and mental health problems because they were afraid they were going to lose their health. And so it's, it made it very hard to separate the sort of like bigger, I call it a risk umbrella, the policies that reduce certain kinds of risks, whether you're going to go bankrupt, if you have a heart attack or things like that. And we've seen a lot of debate in the United States and around the world during COVID over that, the PPP loans and the stimulus checks. And you saw conversations that were taboo earlier, all of a sudden just blown out of the water, printing money all over the place. And I think that's just the beginning of a much bigger look at all of the extra administrative costs of the middlemen. You've got the HR people at the company who goes to the insurance company, who goes to the medical facilities, and you look at a lot of the lost productivity from that. You think, what could we be doing differently with that? So I think really considering different,

what's the best way to provide those sort of risk umbrellas to people so that they can be the most productive in their jobs? It's not good for anyone if someone is staying in a job that they hate because they need the healthcare, but that's a big loser for everyone. And so I think it's worth having a conversation about what's the policy framework that voters can support, that political parties, that elected officials, that agency people can support. What's the kind of set of policies that we can create that encourage good risk take investing in education, it's the biggest risk people take early in their life, and small businesses, which create lots of jobs, how do you encourage these small entrepreneurs? And how do you discourage the bad risk some of these big systemic companies that that make huge

mistakes that taxpayers end up paying for. How do you tweak our policy world to change the risk and rewards system so that we've got more creativity, we've got more productivity, we've got things working better, we've got fewer medical bankruptcies, fewer student loan bankruptcies, and so people are taking good risks and fewer bad risks and protect other people from those. So that's a big wonky question. I'm not going to elaborate on it too much, but I did want to throw it out there because I think it's something that we all need to think about these days.

And sadly, in politics, there's more money in creating division and creating separation of what the values are so that you can get people to tribe up. And that's why our politics, I think, are so broken. The better model is the one that you suggested that we, you know, why can't we all get along? But sadly there's no money in that, I guess, or something who knows for the short term, there's no money in it for the longterm investing in education. Like you said, it would be better, but why do stuff that makes sense? Like really? So there's that. One thing you talk about in your book is I think the risk personality. Do I have that term correctly? Risk personality.

Give me a little bit about that before we go out. So it's part of your risk fingerprint. It's the innate parts of your personality that determine whether you're more methodical or impulsive when you're taking a risk and also how anxious or how calm you are. While I was researching the book, I discovered this tool called the Risk Type Compass developed out of the UK from a company called Psychological Consultancy. And when I first talked to the founder of it, Jeff Tricky, we were on Skype for two hours. And I was giving a speech in Europe several months later in Belgium and popped over to

the UK so I could go and we spent a day together talking. I could have talked to him for hours. But so he developed this tool, the Risk Type compass, which has got the two poles, the anxious versus calm, the impulsive versus methodical. There are eight personality types along that, just like a real compass. And then you're either closer towards the center, which means you've got more shared characteristics with the other ones, or you're firmly tied to one of those personalities. And this is interesting. I'm mildly intense, which is a bit tied to one of those personalities. And I'm, this is interesting. I'm mildly intense, which is a bit of an oxymoron, but it means intense.

Obviously I think a lot about risk because that's what my life is about, but I'm mildly so, which means I can understand the other perspectives, which is being mildly boring. Well, maybe, who knows? But I don't know. I meant mildly boring. They're mildly boring they're mildly boring mildly boring yeah but somebody's mildly intense the the extremely intense is that where it gets so you're just like whoa whoa that's yeah like that's probably intolerable and people ask me is there an ideal type i'm like no there's a matter of being aware of your type and matching

it to your circumstances they've done like 20 000 of these tests and matching it to your circumstances. They've done like 20,000 of these tests. And it's interesting. They said a lot of particular careers end up with a big concentration of particular types, air traffic controllers or lawyers. And of course, it depends on whether you're a litigator or a contracts lawyer. It's like two totally different kinds. And they also said they do work with boards and they said they'll do a scatter plot of the risk types of everyone in the boardroom. And the people who have similar types weirdly often end up sitting together automatically. And so when your own type, you can understand what you're good at or not so good at. He said there was one woman who was

really disappointed that she didn't come across as like adventurous or carefree. That's what she really wanted. And, but she realized, you know what, I'm the only person in this firm who cares about making sure that we are in compliance with the GDPR, the European data productions. And so she realized there was value in her particular risk type. But also if you have everybody in the room, who's the same type, then like I was saying before, it's, you really need an outside perspective. You need someone who can shine a little bit different light on a situation. And it's really important for thinking about innovation and creativity. What's your corporate culture? And they're so much about minimizing risks that they forget about the unintentionally created risks that, you know, taking some risk to zero create. So it's that mix. It's understanding yourself, understanding the people around you, which is something I call risk empathy.

And of course, empathy is a big buzzword in business right now. And I think for good reason. It's a really powerful skill, but understanding not only your relationship with risk, what you're more likely to do, what makes you more comfortable, what pulls you back from the ledge when you need to be, and then how does that relate to your peers? And how can you use an open conversation about risk to come together to agree on things where there might have been an impasse before, but this conversation creates a solution and a path forward. Yeah. Yeah. This is really interesting as I've been thinking about it because there are risks

personalized. One of my friends, one of my old CEOs who was the last CEO who taught me my final lessons on running a successful business, he always said, when you get a board, Chris, don't have a board of yes men. He goes, make sure that there's one guy on the board who's always negative about everything he's that one guy that's just he hates everything he's negative about everything and he's don't fill a board with yes men always make sure there's one guy who's the different guy and he's always going to be negative about everything because when that guy's dead on he's down he's not always dead on right when he's done all right he's going to save you millions of dollars because he's gonna he's gonna be he he's gonna be the uh guy in the street with the sign

that says jesus the world is ending whatever and sometimes you look at him he's talking himself and you're like he's either a prophet or he's homeless should we risk that he's uh not a prophet but it's one of those things but yeah surrounding yourself with yes men having different people but what's interesting is you described how i know as a man a lot of us tribe up and it's why a lot of people follow me a lot of times we surround ourselves with other alphas if we're alphas and we we and it's a tribal thing that we do because we're like we're gonna go hunt dinosaurs throw spears and nerdy weak guy comes along we're like get lost buddy man you buddy, man. You're the person on the team who's going to hurt us. Nowadays, you don't have to worry about that in a corporate structure where you're finding

dinosaurs that the IT guys were the first one that's going to get eaten. But I don't know. Maybe it is. I don't know. I'm just kidding. So anything more we should plug out or tease out on your book? I just want to really go back to this of awareness of how important it is to understand that the risks you take tell the world who you are. They tell them about your purpose, your values, and having a good sense of your

purpose and values yourself is what is going to give you the beacon forward through uncertain times. And so it's a hugely powerful tool for growth, for team organization, for marketing and talking to clients, for talking to investors and suppliers. If you have a supplier and you think that they're cavalier about the risk they take with their products, maybe you want to think about a different supplier. When you're marketing things internationally, here's another tidbit, interesting, that people tend to think that things from other countries are less safe. And in many cases, they're very different standards. If you've got a lot of customers overseas, you want to really ramp up all of

your safety standards and to make extra sure that you don't do anything wrong because you're going to lose your overseas clients a lot faster if you don't think about that element of their risk fingerprint. So it's hugely powerful. Once I started looking to this, I went, this is so crazy. This is such an essential part of our lives, of who we are, of the things that we do. And we don't look at things through a risk lens as much as we should. But once you start, look, it just opens up doors you didn't even know were closed. And that's very true. One caveat, too, that I would add to what you're saying is not only the risk from your vendors,

but also the failure of their risk that can impact you with consumers in the marketplace. A good example is the Foxconn suicide nets with Apple and how that got them in trouble or different meltdowns you found that there there was a high risk version or the right way to put it at the time right now. It was a high risk sort of thing that your vendors were doing. And suddenly you're like, hey, we're not buying Nike. They have child labor. And you're like, oh, crap. Reputational risks are very big right now.

And even more, one tweet can blow up your whole business. Me too. So it shows some reputational risk for some people too as well. Yeah, absolutely. Yeah. One tweet can blow up your whole business. We've seen it a million times where somebody tweets something out and they're out of a job and there it goes. But that's something everyone needs to think about. 35,000 risk decisions a day. Wow, man, I need to go take a nap after this. I think I'm halfway. I think I'm going to start counting. Am I at 17,000? Understanding the little ones is actually really powerful for understanding the bigger risk

decisions that you make. And obviously, as I said before, you make different decisions in different parts of your life. If you see a forecast of 30% rain, do you take an umbrella or not? And why? If you're eating triple bacon cheeseburgers for lunch all the time and your doctor is saying your blood work is a nightmare, how long do you take to do something with it? And then how does that translate into the business decisions that you make? There's a lot of research showing that, for example, when they did that leak of all the Ashley Madison, the cheating on your spouse website data. So some really smart researchers took that and they cross-referenced it with securities violations and things like that. Huge correlation between speeding, drunk driving, things like that.

And those are pretty big risks and blowing up your marriage or driving while you like that. And those are pretty big, pretty big risks and blowing up your marriage or driving while you're drunk. And there are other research showing financial correlation, CEOs financial, if they take big risks with their own financial portfolios, it's more likely to show up in their company. And so, you know, and those go from smaller to bigger, but you shouldn't ignore the small risk decision that you make. And if you can start to create better habits with the little risks in your life, either the active ones, like doing something that's dangerous or the passive ones, the not getting your health in shape, the not exercising, the not listening to your doctor, not listening to your spouse.

If you can start creating habits to make good small risk decisions, that's going to trickle up to the big risk decisions as well. It becomes a good habit throughout your life. Yeah. I would totally agree with you. You've nailed it on the head. I love it. So give us your plugs, Michelle, so people can look you up on the interwebs and order your fine book. Sure. And you can find me on thegrayrhino.com with an A. The E will get you there too, but A gets you there faster. My author site with my earlier books is wooker.com, W-U-C-K-E-R.com. It's also my Twitter handle, W-U-C-K-E-R. I'm on LinkedIn. I have a column that sometimes is more regular than other times. Please do buy the book. I really encourage people to go to your local independent

bookstore or to bookshop.org, which is a site that supports independent bookshops or porchlight books in Milwaukee if you're doing a bulk purchases for business. So it's really important to support all of the independents who went through a rough year, all of us did, but they provide such a service. So look forward to hearing from anyone. I'm very active talking to people on Twitter and on LinkedIn and look forward to hearing your comments or questions or reactions. Yeah, I love it so far. Thank you very much, Michelle, for coming on the show and spending time with us today and sharing this wonderful insight. Thanks, Chris. This has been the most fun conversation I've had in a long time and I have

some really fun ones. So thank you for making it such a pleasure. Thank you. We're always honored. We get a lot of compliments after the show when we turn off the recording. Everyone's like, this is the greatest podcast I did, and I love all this stuff. And I'm like, wow, this is a high-media person that did a lot of touring. And so thank you for the comments. We certainly appreciate them.

It's funny. I watch a lot of people's videos before they come on the show for research. And so when they tell me that, I'm like, yeah, I know we did a great job because I've seen the other videos of the poor hosts that interviewed you and put you through hell. But thank you very much. I certainly appreciate it. Thanks for sharing it with us on the show. To my audience, go order the book wherever fine bookstores are sold, but only go to the place where the fine books are sold because that's where you find Michelle's book. You are what you risk. The new art and science of navigating an uncertain world.

Order the book up. I check up that The Gray Rhino book, too. That sounds like an awesome book, too. I love the thing. It was a number one international bestseller, so pretty awesome. Thanks, my audience, for tuning in. Go to youtube.com forward slash Chris Voss. Hit the bell tuning in. Go to youtube.com for just Chris Voss to the bell notification button. Go to good reads for it's hash.

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