"If you do not change direction, you may end up where you are heading." – Lao Tzu
My biology teacher used to joke, "A pessimist is a man who puts prunes on his All-Bran." It wasn’t funny at the time, but like all jokes, it had a kernel of truth: we all draw our own line at how cautious we should be.
Caution is an evolutionary trait that served us well when mere survival meant steering clear of danger. Cautious people sound wise, and caution is synonymous with prudence which is a virtue. Like all virtues, however an excess of virtue is vice.
When might we be overly cautious?
At its core, caution is the act of avoiding risks. Excessive caution often arises from systems that reward avoidance of downside risks without incentivizing upside gains. Some examples are:
One-Way Mandates:
Many roles or systems are structured so individuals "own the downside" but have no stake in the upside. If things go wrong, the blame is on them; if things go right, someone else takes the credit.
This disconnect leads to risk-averse behaviours because opportunities are "someone else’s job" and disconnected from the person managing the downside.
Lack of Insight into Antifragility:
Antifragility refers to systems or entities that grow stronger through stress or volatility. Examples include:
Germ exposure building immunity.
Allowing businesses to go bankrupt so resources can be reallocated.
Letting students fail exams to learn resilience.
Excessive caution ignores these principles, creating systems that break not bend.
Discomfort Avoidance:
People often avoid what makes them uncomfortable, whether it’s failure, criticism, or uncertainty. This limits growth and prevents tackling real challenges.
The Downsides of Excessive Caution
Excess caution doesn’t just inhibit action—it actively harms progress. Here’s how:
Inefficiency and Bureaucracy:
It breeds inefficiency by creating endless procedures and layers of approval. How many people need to be involved in a £40 expense receipt?
Instead of solving problems, systems become focused on avoiding unlikely risks.
Low-Risk Cultures:
It stifles experimentation and innovation: not losing limits what you will try.
Countries with looser regulations (and less caution) can take the lead in innovation
Distraction:
It reduces productivity in core areas. If you are worried about the paperwork associated with teaching, when will you teach children?
Examples of Over-Caution in Action
Delaying Decisions: Waiting for the perfect moment is procrastination and could mean your competitors beat you to the punch
Fear of Vulnerability in Relationships: You avoid expressing feelings out of fear of vulnerability and in the process make it hard for people to connect with you.
Risk-Averse Investing: Keeps your savings in safe, low-yield accounts only for inflation to erode your wealth
Creativity Paralysis: A new artist avoids sharing work to escape criticism and misses opportunities to experiment and get feedback.
The Paradox of Safety: Why Caution Can Be the Riskiest Move
Avoiding risk entirely is very dangerous. The result? A brittle system unable to withstand future shocks. Whilst we are in many ways in a golden age of risk taking in, for example, technology and venture capital, there are many places where we see excessive caution:
Government:
Many countries are peering down at the abyss in term of debt, demographics and decline but are unwilling to try more drastic measures.
Parenting
Fearful of their children being exposed to the real world, parents are keeping tabs on them and preventing them experiencing independence
This is leading to children being more dependent on their parents
Regulation
Regulation is backward looking and has becomes a laundry list of things learnt from the past.
It is a huge inefficient burden on companies in old industries
“getting it just right” means little regulation on new everyday risks we face vaping, AI and the impacts of Quantitative Easing.
How do we Manage Caution Effectively
Balancing caution and action require deliberate strategies to encourage safe experimentation:
Build in novelty
Have a mandate for doing new things, like a new hobby at a personal level, or for a corporate some bandwidth for new product lines.
Consider the cost of inaction
What if we don’t try anything? Would we be better or worse off?
Incentivize Upside Risk:
Reward successful risk-taking, not just penalize failures.
Final Thoughts
Excessive caution is dangerous. The real world doesn’t value box-ticking. It rewards those willing to experiment, and occasionally fail.
Where are you being excessively cautious?
Next week I will be discussing "A person in the bottom half". Until then, please feel free to read the back catalogue in the democracy series.
Democracy series
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