Don't like Uncertainty? A Harvard Study and Charlie Munger’s Radical Approach might do the Trick

As a salesman there are a lot of parallels to the life of an entrepreneur. Both must deal with uncertainty and manage risks in their day-to-day life. While entrepreneurs carry the weight of an entire company, sales people do so at a smaller scale, solely responsibly for their own pipeline. For this reason, good sales people often times make good entrepreneurs — they have warmed up the idea of failure perhaps thousands of times and are able to contextualize it correctly and find ways to find clarity in uncertain situations. 

This is the part of the job that drives most people away from sales but attracts a minority of people who actually find genuine enjoyment in turning uncertainty into clarity. There are entrepreneurs that are drawn to risky and uncertain situations and the ones that find success more often actually enjoy this process.

Why would you be drawn to the pain of unknown outcomes?

Well, a study found by Harvard Business School Professor Lynda M. Applegate suggests that this risk-taking behaviour is less so a personality trait but a skill. 

There are, simply put, people out there that are ridiculously good at finding clarity in uncertain situations and as they get better at it, they get addicted to the challenge. 

This is the reason why entrepreneurs with several big-time exits continue to get drawn to the challenge of starting from scratch again and again. 

While from the outside, their behavior might seem erratic, excellent risk-takers have a different perspective: they thrive in chaotic situations and actually use them to their advantage. 

So how do you find clarity in uncertain situations?

A framework that I love to use when thinking about problems I’m facing with a project or a specific challenge is „Inversion,“ as made famous by legendary investor Charlie Munger. 

"A problem cannot be solved forward," Charlie Munger claimed, "it must be inverted," taking inspiration from Mathematician Carl Gustav Jacob Jacobi.

“[Jacobi] knew that it is in the nature of things that many hard problems are best solved when they are addressed backward,“ Munger writes.

While the process of inversion can be applied in mathematics, it is equally powerful as a mental model.

For instance, when launching a new product, instead of focusing solely on success factors, you'd identify potential failure points—like poor market fit, inadequate marketing, financial mismanagement, and strong competition. 

By addressing these areas preemptively—through conducting thorough market research, developing a comprehensive marketing strategy, creating a detailed budget with funding in place, and differentiating the product from competitors—you mitigate risks and navigate the uncertainty more effectively. 

All of a sudden, by identifying what could go wrong, you have identified actionable steps and created clarity for yourself. 

The same mental framework can be applied to Sales. For instance, using this model, I could find traits that would surely make me fail as a salesperson this quarter: not making enough cold-calls daily, not following up on old leads, exuding a lackluster attitude, not focusing on the prospects problems, speaking in a low-energy manner. The list could go on, but already I can identify things that could prevent points of failure before they happen, mitigating the uncertainty that comes with sales. 

If you enjoyed this article, please feel free to share it with any one. If you have feedback or any thoughts at all to share with me, just e-mail me at jmpwittig@gmail.com.