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High-Damage, 1%-Chance Risks

One of the more unfortunate things about people is the intersection of responding to incentives and recognition primarily, thinking short-term in time, and not reasoning through events that don't happen.

When an engineer or surveyor goes on and on about improving earthquake or hurricane measures, they're generally perceived as a nag, burden, and hassle -- until you get a bad hurricane or earthquake that costs lives, causes immense human misery, and does millions to billions of dollars in possibly preventable damage.

In business, you wind up with lots of these too. There's dozens of little things that only have a 1% chance of occurring, but the majority of people will perceive you as a hassle if you try to bring them up.

For instance, a friend of mine owns a large bilingual IT firm in a highly developed, non-English country. 

At the advice of one of his mentors, he moved his salespeople's commission structure from the old system that was based just on revenues, to one that had "diversification" as a criteria. This was because his firm was doing most of their business with just a few very large clients, and they had immense leverage over his company. And if one of them should switch providers, they'd have gotten hit with a serious crunch, and potentially would have had to lay some of their excellent team that had taken many years to build.

Habits, Leverage, and Trees

On Tynan

If you want to totally screw up your life, here's my advice: cultivate some bad habits. That's how most people do it. Very few people screw up their lives by drinking once, but a lot of people screw it up by developing a drinking problem. I've never heard a story of someone who went to Vegas for the first time and lost his entire fortune, but I've heard plenty of stories of people with gambling addictions who have blackjacked their way to bankruptcy. Even breakups are far more likely to be caused by habitual bad behaviour than by a single action (even in the case of cheating, a lot of couples stay together).

This is because a single action doesn't have all that much leverage on your life. But habits, on the other hand, define us as people-- literally. What we do regularly becomes a label. Bob's an alcoholic. Tom is a cheater. Raymond is a gambler. Habits change ephemeral verbs (Tom cheated) to nouns. Once you're defined by your habits, it takes a lot to change that. If Bob doesn't drink for a night, he isn't magically changed into tee-totaler. You are your habits.

And that's why habits are my religion. I write about them all the time, from every single angle, and that's mostly a result of being fixated on habits in my own life. If you can change your habits, you can change who you are.  So I pay very little attention to rare occurrences and work on my habits constantly.

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