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Powerful people are more likely to take risks.
This is the result of studies conducted by Cameron Anderson, an assistant professor at the Haas School of Business, and Adam Galinsky, an associate professor at Northwestern University’s Kellogg School of Management.
(The findings were published in the July/August 2006 issue of the European Journal of Social Psychology.)
"Conventional wisdom suggests that low-power individuals should be more willing to take risks, because they have less to lose," Anderson said.
The study lends support to what Anderson calls the approach/inhibition theory of power. In summary, high-power people are often exposed to more benefits and experience less interference from other people when taking risks.
Anderson also said he hopes the business world will take heed of the study.
“Ideally, the study would alert people in powerful positions to the cognitive biases they engage in when perceiving risks and making decisions,” Anderson said. “I don’t mean to imply with this research that powerful people shouldn’t take risks, just that, when evaluating the pros and cons of a risky situation, they should be more balanced in their assessment.”
I believe it is imperative to advise any decision makers not to spend too much time on evaluating the pros and cons of any new idea. They will find that in all cases, that there will be enough reasons not to pursue the idea.
Knowledge always gives enough reasons not to act. You have been warned.
Posted by Kevin Kelly at
September 29, 2006 04:40 PM