CURT NICKISCH: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Curt Nickisch.
In 1978, Steve Blank was a young engineer sent to San Jose, California on a work assignment. He opened the local newspaper to find page after page of job listings. Right then and there, he decided to quit his job and move there. His colleague on the trip was shocked and flew home without him. For Blank, the decision was simple. What was the worst that could happen? For his coworker, it was just too risky to give up your job without a new one in hand.
Well, it paid off for Blank. He founded several successful companies there in Silicon Valley, but our guests today have sympathy for his coworker. It’s natural to avoid risks. Still fear of uncertainty can also block us from opportunity, from changing careers, from starting that business, from pitching that project, from acting on that dream. Today’s guests spoke to hundreds of entrepreneurs and innovators and leaders. And from those interviews, they’ve learned strategies to embrace uncertainty and to change your thinking so you go after the possibilities hidden in the unknown.
Nathan Furr is a Professor of Strategy and Innovation at INSEAD and Susanna Harmon Furr is an entrepreneur. Together they wrote the new book, The Upside of Uncertainty. Susanna and Nathan, so nice to speak with you.
SUSANNA HARMON FURR: Thanks for having us.
NATHAN FURR: Great to be here.
CURT NICKISCH: Just to clarify from the get go. If people wonder about the names you are a married couple, one of you studies entrepreneurship. The other is an entrepreneur. Both of you are inspired by it. Do either of you suffer from the fear of the unknown more than the other?
NATHAN FURR: I definitely do. So my advisor at Stanford when I was doing my PhD, always used to say, “You study what you wrestle with.” And I’m curious about uncertainty because I struggle with it. And I think Susannah is somebody who’s good at it. And so this is kind of a marriage also of kind of studying and researching something you struggle with. And also the wisdom of someone who does it well.
I’ve been interviewing entrepreneurs, innovators for decades. And I really was curious because I noticed that to do anything new, they had to go through uncertainty. They had to face the unknown. And so I wanted to know, well, how did they get better at that? Because I need to get better at that. But to be honest with you, it was a little bit more of an academic approach, meaning it was at a distance. But then what happened is the COVID pandemic affected us all. And for me, a lot of my income is keynotes and teaching and all that was gone within the space of five days and I was freaking out. I was really anxious. And at that time, Susanna and I were co-authoring this, but she said to me, “Hey, if you can’t apply these tools to help yourself, I won’t let you write this book.”
SUSANNA HARMON FURR: One thing I will say is, even though Nathan says, oh, you’re better at it, I would say I’ve always admired how he was so curious and wanting to learn about it and wanting to prove to help people be able to also learn it more. So long before I had decided to join the book, I was always just thrilled. I was like, tell me about this conversation you had with so and so, and we would discuss it. Because in our own personal lives, we really wanted to make some changes from kind of some of the ways we’ve been raised. I mean, moving abroad, we wanted to go to France. We wanted to do some things that we knew were going to try us in ways that we weren’t really necessarily prepared for.
CURT NICKISCH: Why do so many people focus on uncertainty, maybe more as opposed to the possibility that comes from the unknown? What is it about being human that makes us so afraid of that?
NATHAN FURR: Well, the neuroscience confirms it. We are wired to feel anxious in the face of risk and uncertainty. That is just a evolutionary response we have. Where say going 100 miles from where you’re living doesn’t really get you much opportunity that response is maybe a positive evolutionary response, but what’s changed is we live in a radically different world. We live in a world to be honest of possibilities where there’s constant change, constant dynamism, we need to be adapting.
There’s huge benefits to taking a step or two away from your home base. And what we kind of need to do is learn how to face that. But the big thing for me, the big aha on this journey that happened a while ago was I was really focused on how do you navigate uncertainty. But what I soon realized is that, gosh every possibility, everything that we talk about in terms of when we talk about innovators and their achievements, or think about your own life, think about the things you’re proud of, the career moves, the geographic moves, the relationship moves, whatever it may be. All of those good things only came after uncertainty. And so for me, the big realization was, oh my gosh, uncertainty and impossibility are kind of two sides of the same coin. So we all want possibility, but to get that we’re going to have to really learn to face the uncertainty more calmly and with greater resilience.
CURT NICKISCH: And have you seen people or businesses just, I don’t want to say go down the drain, but really punish themselves because they are too afraid of uncertainty?
NATHAN FURR: Absolutely. I mean, I will say it’s kind of an unfortunate, innate response. We have people really are kind of programmed, taught that it’s the good thing to do to make their lives more certain. They kind of instinctively go try towards trying to lock everything into place. And what we don’t realize is that if we succeeded in locking everything down, we would actually be really, really bored. And one of my favorite interviews was with the head of a national gambling organization saying what we do is basically reverse insurance. We sell people the uncertainty that something else new could happen in their lives. And so I see it at a personal level, but I also very much see it at an organizational level.
SUSANNA HARMON FURR: As an entrepreneur, there’s always this moment where you’re feeling like is this going to fail? Am I going to be able to do this. For me, particularly Nathan was doing his PhD at Stanford. And I actually think that, I was in the Bay Area and it was so compelling because so many people were doing startups. So it felt it was more normal there. So I think sometimes when we’re in a culture where other people are going for it’s a lot easier. Now, if you don’t live in an environment of that, luckily today, you really can find those forums online. But you got to be encouraged. I think when we’re around people that are too scaredy cat, you’re going to feel more nervous about it.
CURT NICKISCH: When people get to that point what are the upsides about thinking differently about uncertainty?
SUSANNA HARMON FURR: It’s kind of immediate. We actually love to call that moment transilience, which is beyond resilience. This moment, where you shift from seeing the uncertainty only, and all of a sudden you’re seeing all the possibilities. So the upside is instead of worrying about the small kind of quotidian, “Oh no, what if I go down here? And then I miss this, or my boss is going to be mad, because I was late on this thing.”
All of a sudden you’re thinking about the most important things you’re getting excited about… Basically everything just is illuminated because you’re not as worried about these teeny little fractured moments. And you’re thinking about, “Hey, how can I be a better player on this team? How can I be a better spouse?” You’re just going to be changing actually I would say in all the facets of your life, because the possibility is so energizing.
CURT NICKISCH: So let’s talk about that reframing moment or the task, I guess, of reframing when you really are afraid. Take us through an example or what are you talking about here?
NATHAN FURR: In the research we did, we came up with 30 plus tools that can help us to face uncertainty. That’s a lot. How do you remember that?
CURT NICKISCH: It would take more than 20 questions.
NATHAN FURR: It would take a lot. And so what we tried to do is organize these around a metaphor of what we call first aid cross for uncertainty. So we’ve seen first aid cross has four arms. So there’s four categories of things to do. And the first as you highlighted is to reframe. Now, what does that mean? So there’s a deep body of evidence from the field of psychology and behavioral economics that highlights that we are wired to fear loss. We’re loss averse, and we’re gain seeking. So the problem that uncertainty presents is it presents to us as a loss. And so we’re afraid of it. What’s going to go wrong? What am I going to lose?
CURT NICKISCH: Which does exist. It’s not irrational.
NATHAN FURR: Yeah no, no, absolutely. There are downsides to uncertainty and I want to be clear. We think about both planned uncertainty. So like, when you go say I’m going to take this new job, but also unplanned uncertainty, like COVID pandemic happens to us. So there’s downsides more typically with the unplanned uncertainty.
But how do we reframe what is happening and what is there? So let me give you an example. Let’s take COVID pandemic. I saw leaders who framed the COVID pandemic saying things like this is the worst thing that’s ever happened. This is worse than the great depression. Which was maybe true in terms of unemployment numbers at a certain period of time, but untrue in many other dimensions. But what affect did the way they framed that have? Well, it made everybody freak out.
By contrast, if you saw like Brian Chesky of Airbnb, which is in one of the industries most negatively affected by COVID, what was his response? His response was to frame the opportunity. He said, this is our moment. Great companies are forged in moments of crisis. This is our chance to show that we’re not some kind of snowflake of the internet. And if you’re kind of thinking, oh, Nathan, this is nice and soft. It doesn’t apply to companies.
Let me tell you, when we look at, for example, disruptive innovation, what we see is that incumbents that are able to respond to disruption, do they frame it in terms of the threat and what’s going to happen to us if we don’t respond, or in terms of the opportunity. What we’re finding in the empirical evidence is it’s much more effective to frame it in terms of the opportunity. In terms of the possibility.
And you look at like the contrasting cases of like Borders and Barnes and Noble. One of the most important reasons why Barnes and Noble is around today is because they framed it more in terms of the opportunity. And so this is a deep, deep principle of reframing uncertainty. So that it’s something we feel like we can do rather than something that’s going to rob us blind.
SUSANNA HARMON FURR: So there’s several tools about that notion of how do we stop seeing uncertainty as just a warning, flashing red signs and jump it into possibility. The other, maybe half of the tools are about reframing what you even thought was possible. So getting a much more expansive view.
So some of those tools are about the adjacent possible, this idea that there’s this actual reality hovering nearby. It’s like we might not even have to do that much to live that into being. But we’re just not seeing it. And so we kind of talk through what that might look like.
Or the infinite game tool, an idea by the late professor of NYU James Carse. And this idea that instead of being a finite player who just wants to win and be the best and is always saying, “What’s the rule, how do I execute on this exactly.”
An infinite player is constantly playing with the boundaries, the roles, the rules, even the purpose of the game. And so some of those reframe tools are about once you see the upside and you’re excited about it, how do you get the biggest, broadest expansive view for what you’re going to go do? What uncertainty you want to tackle, or if you’re facing an uncertainty that you didn’t choose, something horrible. Again, we need an expansive view of what all is possible when we’re going through something really hard.
CURT NICKISCH: Let’s give an example of this concept of the infinite game or somebody who really changes the game, because this was one of my favorite parts of the book. What were some of your favorite examples?
SUSANNA HARMON FURR: I think one of our favorites in the business world is Yvon Chouinard who started Patagonia because he was just such a contrarian. And he calls himself a dirtbag climber, and he was following kind of his passions and his little teeny company out of the back of his van grew and grew and grew. But he actually has a quote where he talks about playing his own game, that he was never going to be able to do it by the regular rules. I think he got kicked out of school. He’d moved over from France. He was teeny, he was short, he was bullied terribly, but he just kept figuring out what he loved to do. And he broke so many rules and he was doing stuff like growing organic cotton long before anyone else. And people would say, this is ridiculous.
And even during the downturn of what, 2007, his board was saying, we’ve got to go back from this organic cotton. He’s like, no, this is going to set us apart. He’s got moxie. He just keeps going in the direction that he feels empowered by also they, he and his wife, they started one of the first campus daycares on site for their staff. So again, not waiting for someone else to do something awesome. But just saying like, how do we be more infinite? One of my favorite things about infinite players is they are less competitive because they are not as interested in winning.
And James Crase, he describes this. They actually want to keep the game in play because let’s face it, once someone wins the game’s over. So he talks about this very cool and nuanced, but abstract idea of what would it feel like in the world if we were less dead set on winning?
What if we were wanting to keep the game in play and we were less competitive? I mean, I want to be in that world to be honest.
And one of the coolest stories comes out of the Tour de France, which is happening right now again, but it was the 1964 race. And there were these two racers. One was like the one everyone knew was going to win. He’d won before.
NATHAN FURR: They called him a robot.
SUSANNA HARMON FURR: Yeah. Jacques Anquetil. He wasn’t the favorite. He was a master of just the time trials. He always did the best. And then there’s this… I can’t remember his name.
NATHAN FURR: Raymond Poulidor.
SUSANNA HARMON FURR: Raymond Poulidor, who ultimately, absolutely loved the race. And you’ve got to look up pictures of this race because they were shoulder to shoulder for 10 kilometers up and down steep hills. It’s called the Puy de Dome. It was the hardest segment. Not one of them went behind to kind of draft for a while for 10 kilometers, straight heat, going side to side and ultimately Poulidor, the non-winner up to that point, won that segment. And ultimately, he never won a tour de France. I think he did 11 or something.
NATHAN FURR: He raised 14 times. He never won one of them, but people loved him, loved him more than any rider. They called him the eternal second. And near the end of his riding career. Somebody said, “Poulidor, your head was in the clouds.” And he said “Maybe it was true because I never woke up in the morning thinking about winning. I loved so much that I got to race and I got to ride this bike.” And I think that’s what people recognized in him. Nobody really remembers to be honest Anquetil, the guy won four times. Nobody cares. People love Poulidor though. Because they recognize the heart and soul of that infinite player saying, I’m playing, because I love this game.
CURT NICKISCH: I think where a lot of people trip up though, is they see the possibility and they realize they could do different things. They could start a company, they could make a riskier job move, it’s just deciding to go forward with it. It’s deciding to do it. What other tricks did you learn from some of the people you talked to for getting past the reframing and then moving forward?
SUSANNA HARMON FURR: I think it’s going to be a real personal thing. What takes you from that moment of, to go for it? We talk a lot about values over goals in the do section. So that part, when you’re ready to take action. And I think when someone has a real clear sense of what their values are, it makes it easier to feel like going for something. And the main entrepreneur who really embodied this is David Heinemeier Hansson, who has done Ruby on Rails and base camp. And he did an email platform that launched a few years ago. Hey.com.
But he basically just said goals are kind of BS because we often think like, oh, we’re going to exit with this much. We’re going to have this many customers by this date. And it really, it is so much out of our hands, how that goes. And so he says, when he works, he has three main values that he aligns with. And after those, he says, I’ll be happy. And actually I can’t fail if I do those.
And his three are writing really good software. The second one is treating his employees as well as he can. And that includes in the summers, their four day work weeks, just everybody gets that. And then the third thing is acting ethically in the marketplace. And it was so inspiring to talk to him because he really said, listen, I honestly was able to feel at the moment when we were launching, hey.com and it was looking like it was going to get squashed by Apple because they wanted to charge all these fees.
Ultimately he was the underdog and he wrote some posts and people just rallied. Like what, no way these guys have to be able to have this app and we want this. And so it ended up working out. But he basically said, even if we walked away after millions of dollars and two years of time, we learned so much stuff and we hit those three values that it’s not a failure. And so if someone just has an idea of a company or an idea of a move, if their value isn’t directly aligned with it, I don’t think they should go for it. I think it really needs to resonate deeply in their core of who they are, because then there will be some fuel there for going through it. Because it is going to be tricky.
NATHAN FURR: I would separate it out into one, the decision to go for it. And number two, how to actually structure that to go for it. Another tool we talk about is regret minimization, a lot of the entrepreneurs and yeah, we did interview Jeff Bezos. And back in the day when he made this really risky decision in 1995 to leave his job and start this internet platform and he talked about-
CURT NICKISCH: Not just a job. It was a really well-paying wall street job, that was the problem.
NATHAN FURR: Yeah. So I guess the full story is he was working at DE Shaw, which is like one of the leading quantitative hedge funds. This is like the job of jobs, the dream job.
CURT NICKISCH: And his boss told him this would be a great idea for somebody else who didn’t have such a great job.
NATHAN FURR: Yeah. And by the way, he’d leave his bonus on the table if he left all these things. And so how do you make that decision? And he said “I wanted to look back at my life from the perspective of age 80 and say, what will I regret?” And he was very clear. I wouldn’t regret trying and succeeding. Who would? I wouldn’t regret trying and failing. The one thing I’d regret is never having tried. And so I think that’s an additional nice piece to make the decision. But I just want to add in terms of how you structure it. We learned something really useful from the gentleman who won the Nobel prize in chemistry in 2016, Ben Feringa. So he’s a really interesting character. If you’ve read those science fiction stories about robots running around in your bloodstream, curing cancer and things like that, it would be based on his invention of molecular machines.
And we got to ask him, say “Hey, so did you face uncertainty on this journey to creating a breakthrough?” And he like just laughed out loud. It was all uncertainty? But I asked him, so how do you face it and how do you teach your students to face it? And he said, “Well, I always want to have two legs to stand on. That we have one project that’s uncertain and one project that is certain.” What I would call a personal, real options approach because it helps you kind of quit if it’s not working. He said, if you only have the uncertain project, if you go all in on that, you’ll follow it too far down the road and not give up when you should or not pivot when you should.
But I think there’s a lot of wisdom in that. And there’s actually some empirical research to support that. That for example, hybrid entrepreneurs, so entrepreneurs who keep their daytime job and do something on the side, they actually outperform folks who quit their jobs. Why? Well, because they have more time to figure it out, pivot, get it right, figure out where the value is. And so we talk about if you could adopt a personal, real options approach, it would probably be better. The problem is rarely that we’re going all in on the risky option. The problem is more often for most of us is that we’re all in on the certain option. And we’re not creating a personal, real option for the other things we dream about.
CURT NICKISCH: So how do you know when it’s time to really take action? When you reach one of those round birthday numbers.
NATHAN FURR: Yeah. Well, it’s a great question. So first off I believe life is highway with many on ramps, so there’s never too late. But I would say so again, when we talked about-
CURT NICKISCH: Ray Crock started, McDonald’s in his middle age.
NATHAN FURR: Actually, yeah. I could tell you story upon story of very late on ramps. So yeah, absolutely. But I guess I would say number one is we talked about these four categories of tools. Reframing, we talked about priming is how do I get ready for the uncertainty. Doing is how do I take action under the uncertainty. Sustaining is how do I help sustain the difficult emotions that come with uncertainty, including setbacks.
So I really want to emphasize that idea of what will I regret? So that’s a useful tool, but a second thing that I think is kind of helpful is a tool that was taught to me by one of my mentors at Stanford. Tina Sealy. So Tina Sealy is a professor at Stanford. And I remember while I was there, Susannah had started her company and I was feeling like, “Oh my gosh, I’m so boring. I’m this academic, I should like maybe quit my PhD and go start a company if I was really courageous.” And I went to lunch with Tina and I kind of confessed that. I said Tina, “If I had any courage, I would quit and I would go start a company.”
And she said, “Well, what are you talking about? What do you mean?” I said, “Well, I’m just not a risk taker. I don’t have the courage to go be an entrepreneur.” And she said to me, “Well, Nathan, do you really think there’s only one kind of risk?” I was like, “What are you talking about Tina?” She said, “Well, in my mind, there’s financial risk. There’s intellectual risk. There’s social risk, there’s physical risk. We could go on and on.” And she said, “You are someone who seems like you’re willing to take an intellectual risk to try out a new idea or a social risk to talk about it openly. You have four kids living in Silicon valley on a PhD student’s stipend because your partner is starting a business at the same time, by the way, which isn’t making money yet. I am glad for the sake of those four kids, you are financially risk averse.”
And what she was teaching is that we all have a natural affinity and aversion. And it’s useful, number one, just to kind of try to understand where are our affinities and aversions, because then we can play to our strengths. So I should be taking more intellectual and social risks. But also we can recognize where we might get ourselves in a lot of trouble. And I do believe that if I had quit that PhD and gone and started a startup and things were going poorly and the money wasn’t coming in the door, maybe I would’ve done something unethical or just I would’ve acted really poorly because I was too stressed out.
So number one, baseline, understanding where your affinities and aversions can help you make wise choices. But then number two, it doesn’t have to stop you. Just because say, for example, you have a financial aversion. So Susannah mentioned David Heinemeier Hansson. He’s very clear. He hates financial risk. So how in the world has he done eight startups? He always makes sure knowing that he hates financial risk, that he has a project, a consulting gig or some other project that’s paying the bills. And then he can do his more innovative, risky project on the side. That way he can be calm and act according to his values rather than according to being anxious and uncertain.
CURT NICKISCH: So you’re really saying that if you’re afraid of doing something, to try to understand why and validate that. To recognize it and then figure out how to move forward with whatever that risk is. You have to kind of map it out for yourself and know what your individual take is?
NATHAN FURR: Yeah. What you’re comfortable with and to set yourself up so that you can be calmer when you step into the unknown. So knowing that say, if you had a financial risk aversion, creating an income stream that keeps you calm or having savings, or having a backup plan like you talked about, or a partner earning money. But one little tiny warning I learned from another mentor, Bob Sutton, who’s also a professor at Stanford, and that is be careful about your risk aversions and that they’re not stopping you or holding you back from the things you care most about. I’ll give you another personal example. At that time, again, money really tight. Us PhD students were bringing peanut butter and jelly sandwiches from home to save a couple bucks on lunch. And I’m sitting in class with this famous Stanford professor.
And he tells me, “Oh, when I was a PhD student you, I borrowed 30 grand in today’s dollars to get my research done.” And like the top of my head blew off. I’m trying to save $3. You borrowed 30,000. What’s going on here. And what he said is like, I knew the most important thing to getting what I wanted, which was getting a good job and keeping it. In this case, he got a job at Stanford and kept it. Was getting that research done? So why not risk a little bit towards that? And for me, that was really helpful advice. Because I have at times push myself to take financial risk, even though I though I’m a little risk averse, because I realize it might be holding me back from what I really want. And I would encourage people to say again, on those frontiers of risk. Sometimes it’s an emotional risk we’re not taking or a career risk or intellectual risk or a financial risk. It’s not just money that might be holding us back from the thing we really want.
CURT NICKISCH: Well, I have to say thank you for bringing all these stories from different people. It is infectious. When you read the book, you just see a lot of people doing things and you feel like you can be open to the universe and you might just be rewarded for it.
NATHAN FURR: Wow. Thank you for having us.
SUSANNA HARMON FURR: Really fun.
NATHAN FURR: Yeah, a fun conversation. Thank you.
CURT NICKISCH: That’s entrepreneur Susannah Harmon Furr and INSEAD professor Nathan Furr. They wrote the new book, The Upside of Uncertainty.
If you got something from today’s episode, we have more podcasts to help you manage your team, manage organizations and manage your career. Find them at hbr.org/podcast or search HBR in Apple Podcast, Spotify or wherever you listen.
This episode was produced by Mary Dooe. We get technical help from Rob Eckhardt. Our audio product manager is Ian Fox and Hannah Bates is our audio production assistant. Thanks for listening to the HBR IdeaCast, we’ll be back with a new episode on Tuesday. I’m Curt Nickisch.
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