A little over a month ago I wrote a post I titled Everyone’s Doing It: The Impact of Consensus. It provoked quite a reaction, especially on LinkedIn. Here’s a small sample of comments from readers:
“It’s called groupthink. Look it up. Don’t hide in the flock of sheep. Emerge the solitary extrovert with an independent brain!!”
“Consensus is not a reality- it’s an abstract concept. Dissent is always essential.”
“Consensus is an effective (cowardly?) way to hide from having to face the fact that no innovation took place because of consensus, but in spite of it.”
If I had to characterize most of the response it was resistance to the idea of consensus, following the lead of others. People don’t like to think of themselves as followers but we all follow more than we realize. It’s why we generally buy Amazon products that are rated four and five stars and avoid products that primarily get one or two star ratings. It’s why we tend to go to crowded restaurants instead of empty ones. And seldom do we go to movies that get poor reviews. (An exception to that might be movies that “critics” pan because the views of “critics” are often contrary to the average moviegoer.)
The subject of consensus (a.k.a. social proof) came back to awareness as I watched Ray Dalio’s Ted Talk “How to Build a Company Where the Best Ideas Win.” Dalio is a well-known hedge fund manager and what caught my attention were his comments about risk, reward and following the crowd.
In a nutshell, Dalio told the audience when it comes to investing following the crowd, the market, won’t make you rich. Why is that the case? It’s like riding in a bike race and staying in the pack. You can do okay but you won’t win being in the pack the whole race. The people who are willing to take a risk and break from the pack have a chance to win but there are risks that could lead to big time failure too. And so it is when it comes to investing. Breaking from the market and conventional wisdom might help you make a lot of money but it could also result in big losses.
Why don’t more people break from the pack? Because human beings are generally risk averse. Daniel Kahneman won the Nobel Prize in Economics for his work on loss aversion. Kahneman and his late partner Amos Tversky statistically proves humans feel the pain of loss anywhere from 2.0-2.5 more than the joy of gaining the very same thing. Consider for a moment the safety of the crowd combined with the aversion to loss most people feel and you see why the so many generally play it safe and go along with the crowd.
Are there exceptions to the rule? Absolutely! I’m sure as you read this you can recall times when you went against the grain. We generally do that when we’re convinced we’re right, regardless of what everyone might say or do. That same sense of certainty is what leads some people to go against the crowd and gamble on their dream job, go for broke in the stock market, or passionately pursue their dreams. That’s how some people make it big. But don’t be deceived, far more people don’t land their dream job or become wildly rich because it’s hard and the odds are against them. After all, if all it took was the courage to take the first step or determination to do the work then everyone would be going for it and everyone would be rich. But that’s not the case because the greater the payoff the greater the risk and as we’ve already seen, most people are loss averse.
This post isn’t intended to discourage you from pursuing great things. On the contrary, it’s intended to open your eyes about what may be holding you back. Hopefully after reading this some readers will realize why they’ve not already taken that first step and decide to go for it. Even if you fail, there may be great things in store for you. I’ll end with the famous quote from Teddy Roosevelt on this subject:
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”