I’ve been haunted by a story I read in the New York Times business section a week or so ago. Dr. Gregory Berns, who runs the Center for Neuropolicy at Emory University, cooked up an experiment to determine what fear does to our decision-making process.
To measure the impact, he told his volunteers that they were going to get a series of electric shocks – but they wouldn’t know exactly when. By leaving his subjects in suspense, he was able to use magnetic resonance imaging of the brain to assess the amount of fear they were experiencing.
As Dr. Berns explains it:
"Every trial began with a statement of how big the shock would be and how long they would have to wait. For many people, the wait was worse than the shock. Given a choice, almost everyone preferred to expedite the shock rather than wait for it. Nearly a third feared waiting so much that, when given the chance, they preferred getting a bigger shock right away…it sounds illogical, but fear — whether of pain or of losing a job — does strange things to decision-making."
Berns put his experiment in the context of the current economic situation, and how fearmongering has a contagious effort that creates a "downward spiral." He advises that we should "avoid people who are overly pessimistic about the economy" and that we should be "tuning out media that fan emotional flames."
But I’ve been ruminating on this for another reason: because of what Dr. Berns has identified, we are now in a business climate that gives no quarter to freshness, imagination or boldness.
I see the way that fear and anxiety warp ordinary business practice, from the smallest decisions to the most over-arching. Sometimes it’s subtle, and sometimes obvious. But the results are consistent: People are afraid to propose the dramatic step, and decision-makers are reluctant to take it. I’ve seen venture capitalists – the most risk-taking brains of them all – turn turtle-like, with a bad neurological case of Seinfeldian shrinkage.
Mediocrity (which is a less euphemistic word choice than "safety") is our default. The comfort in the known is palpable. New ideas are either suffocated or damned with faint praise: "Interesting, but now isn’t the time to try it."
Of course, now is precisely the time to try it.
All of this is a matter of Darwinian bad luck: we are biologically blocked from boldness. That’s because over millions of year, our brains have evolved very precise mechanisms for dealing with crises. But these reactions are often no longer useful in the modern world. Which means that our hard-wiring can actually make our lives harder.
So when we read about people getting canned and carrying their stuff out in boxes, it triggers ancient brain systems that encourage us to hold onto what we have. It’s called the endowment effect.
"The most concrete thing that neuroscience tells us is that when the fear system of the brain is active, exploratory activity and risk-taking are turned off."
The only way we’ll be able to turn our economy around – once the financial system settles down, trust is restored, and capital becomes available – is through just those "exploratory" activities that fear shuts down.
We need to be developing the next new ideas, right now, that will capture the imagination of consumers (after all, the consumer economy is more than 65 percent of the GDP.) We must be fearless when it comes to new ideas in sustainable energy, infrastructure improvement, nanotechnology, and dozens of other sectors.
It’s not easy to battle our own biology. But understanding how fear makes us mental milquetoasts can be a first step in jolting us into action.
It had better be. Because innovative, surprising and even scary ideas need to be nourished and funded now.
Otherwise, when the economy is ready for them, they won’t be ready for it.