Risky decision-making essential to entrepreneurialism:
[Via EurekAlert! – Policy and Ethics]
(University of Cambridge) Whether someone will become the next Richard Branson, Steve Jobs or Henry Ford may be down to whether they make risky decisions, scientists at the University of Cambridge have concluded.
This is part of a series of articles in Nature about innovation. Of interest here is the attempt to understand how some people make really good decisions under periods of stress with limited information. The commentary in Nature (may need a subscription) indicates that the entrepreneurs (mean age 51) took risks similar to young adults while other types of managers acted more their age.
The ability of the different types of managers to make cold decisions was the same. Differences were only seen when hot decisions had to be made. The ability to be mentally flexible while making decisions under stress could have real survival characteristics. Whether the jungle is in Africa or on Wall Street.
I did like this sentence from the article since it helps explain why this sort of behavior we see today could be unique:
One of the beneficial effects of entrepreneurial clusters in regions such as Silicon Fen may be that the increased networking and contact amongst the entrepreneurs works to create a culture that normalizes a more risk-tolerant type of decision-making.
Because we now huddle these types of people together, their ‘odd’ behavior becomes normal. The human social networks help amplify this sort of decision-making. Perhaps it can be leveraged to help us do more than just make money for startup companies and venture capitalists.
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