“I have it all figured out”, said the charismatic founder of a technology company during a pitch to potential investors. This company had developed an innovative product with promising prospects. Going by the founder’s words, it would seem that he had gazed into a crystal ball, figured out exactly where the world was headed and had a foolproof plan to make sure he came out tops.
Yet, those of us who heard his presentation found something deeply amiss. There was no space to acknowledge that things could turn out differently, no latitude to maneuver or change course. Sure enough, over time, as the venture faced headwinds, the founder was in denial. He doubled down on what wasn’t working, rejected feedback, surrounded himself with yes-men, and continued to paint a rosy picture to stakeholders even as the venture unraveled.
This episode reminded me of what I had heard about the fall of Nokia as it rapidly lost market share to the iPhone in the late 2000s. A behemoth in its heyday, its management team was so overcome with hubris that they were oblivious to their shortcomings and impervious to feedback. It was not until the cozy cocoon turned into a ‘burning platform’ that realization dawned. By then, it was too late.
Our professional and social environments place a premium on supposedly having things figured out. Talking heads on TV channels, Twitter influencers, and Whatsapp debaters, all have one thing in common the ability to wax eloquent on everything from inflation to pandemics to geopolitics without batting an eyelid. Whether it is a CEO at a Board meeting or a candidate at a job interview, rarely does anybody say “I don’t know”.
My own early experience in the investment world was similar. I was heading equity research teams at global investment banks and was expected to be a ‘know-it-all’ on a wildly disparate set of things. Questions from our blue-chip investor clients would range from whether a company’s stock price would go up the next day, to what was going on in the finance minister’s mind, to whether the monsoon rainfall in Bihar would be good. Answering these with a web of logic was “smart”. “I don’t know was not an acceptable answer”.
It took me many years to realize that making good investments does not require omniscience, the state of knowing everything. Legendary investor Warren Buffett said, “You don’t have to be an expert on every company”; “you only have to be able to evaluate companies within your circle of competence.” He famously invested in PetroChina after reading the annual report because the rationale for the investment screamed out to him. Sometimes, cutting to the chase requires dodging the curse of ‘analysis paralysis’ that affects so many experts who lucidly spout knowledge but find themselves unable to make a decision.
This is not intended to be an apology for those who revel in ignorance. On the contrary, acknowledging what we don’t know is a stepping stone to growth.
Dodging the bullet of denial enables us to avoid mistakes because we are no longer lulled by a false sense of security. I have seen many investors blow up their money because they mistook luck with skill, started ‘believing their own balderdash’, and placed gambles where they had no edge. Acceptance enables us to work on what we don’t know. It enables us to recognize complexities, and be nimble and flexible to adapt. A CEO who knows what he doesn’t know can hire the right people with the requisite capability.
But saying ‘I don’t know is not easy. Firstly, our social and professional milieu does not encourage it. While it is up to leaders to instill a culture of openness, each of us needs to choose between sounding smart versus pursuing the truth.
But there is a bigger barrier to admitting that ‘I don’t know, and that is our fear of losing control. Our illusion of control stems from our illusion of omniscience, and shedding this is not easy. Yet, beyond this fear lies redemption, the ability to walk into uncharted waters with the curiosity of an explorer.
It was this sense of wonder that drove Richard Feynman, famous physicist and Nobel Prize winner to say, “I don’t have to know an answer. I don’t feel frightened by not knowing things.” We too can unlock this sense of vibrance and wonder in our lives. But for that, we need to have the courage to say “I don’t know” first.
S. Venkatesh is the bestselling author of AgniBaan and KaalKoot, a leadership coach and an investor who has held key positions with JP Morgan, Credit Suisse and Macquarie. He writes about mindfulness and its link to creativity, business and wealth.