What can the Stoics teach us about managing risk?
In recent years I’ve become fascinated with the ancient Stoics and have done quite a bit of reading on the subject and this has reshaped some of my personal beliefs and led me to incorporate elements of this philosophy into my daily life. You’re probably reading this and thinking I have too much time on my hands but in reality, what drew me to Stoicism wasn't a penchant for navel gazing but rather its practical nature and the fact that its enduring truths are as relevant today as they were some 2000 years ago. In fact, I even find myself drawing on Stoic principles in my day-to-day work advising clients, which begs the question; what can the ancient Stoics teach us about managing risk?
The Stoics understood that a life plagued by negative emotions like; fear, anger, anxiety or grief can be extremely detrimental to our quality of life, not to mention our performance so they developed a variety of techniques to prevent or neutralize these negative emotions.
The Dichotomy of Control
The first is commonly referred to as the Stoic Dichotomy of Control, which in simple terms classifies things into two distinct categories; those things which are under our control and those things which we have no control over.
“Some things are within our power, while others are not. Within our power are opinion, motivation, desire, aversion, and, in a word, whatever is of our own doing; not within our power are our body, our property, reputation, office, and, in a word, whatever is not of our own doing”. (Enchiridion 1)
While some might argue there is a third category i.e. those things that are partially under our control the main point, I’m attempting to highlight here is the difference between the first two. Steven Covey had a variation on this technique in his book the Seven Habits of Highly Effective People (Simon & Schuster 1992) where he talked about our circle of influence and our circle of concern. Similar to the Stoics, Covey felt that most people had a tendency to focus their energies on their circle of concern or those things we have no control over, while neglecting their circle of influence i.e. the things we can influence or assert control over. Covey posited that by focusing our efforts on the things we can influence or control, our circle of influence will expand over time while if we focus on our circle of concern our circle of influence can actually shrink.
This rings true from a risk management perspective as well. It is easy to become distracted by those things which are outside of our control and this behavior ultimately detracts from our most effective course of action, which is to focus our efforts on controlling the controllables. To quote the serenity prayer; “grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference. To get the maximum return on our efforts and avoid wasting valuable energy and resources this is an important distinction in both risk management and in life.
Negative Visualization
Many of you will be familiar with visualization and may have used this technique in your own lives to manifest a desired outcome. It is especially popular amongst athletes and can be as simple as sitting in a comfortable position, closing your eyes and imagining in vivid detail achieving a specific goal or objective. The Stoics had a unique take on visualization, whereby they would use this practice to contemplate the bad things that might happen to us. The Latin term for this form of negative visualization is praemeditatio malorum, meaning, to think beforehand about the bad
This might sound like a pessimistic approach to an otherwise positive practice, but the Stoics believed that the benefits of negative visualization were twofold. Firstly, by identifying those things we value most, then contemplating losing them this practice provides us with a new appreciation for the things we already have. Secondly, by contemplating the worst-case scenario we are inoculating ourselves against potential misfortune so that when the unavoidable happens we are able to respond to adversity in a calm and deliberate manner.
“Nothing happens to the wise man against his expectation,” Seneca wrote to a friend, adding that “. . . nor do all things turn out for him as he wished but as he reckoned—and above all he reckoned that something could block his plans.”
This is another important lesson from a risk management standpoint because even the best laid plans involve an element of risk and failing to consider the worst-case scenario can undermine our resilience and leave us ill prepared for when disaster strikes. Negative visualization is a useful tool that prepares us for adversity. Anticipation doesn't magically make things easier but it does fortify our response and prepare us for when things go wrong and if the worst case doesn't eventuate we are no worse off for adopting this strategy.
If you’re interested in learning more about Stoic Philosophy a good book to start with is; "A Guide to the Good Life" by William Irvine (Oxford University Press 2009). Irvine has done a great job of taking this ancient philosophy and making it more accessible to a contemporary audience. Another excellent place to explore Stoicism is through the work of Ryan Holiday; www.thedailystoic.com. For those in search of a deeper dive on the topic, pick up the Hays translation of Marcus Aurelius - Meditations or Sharon Lebell's "The Art of Living" which is a contemporary interpretation of the key ideas of Epictetus.
