No Fail Bets

Imagine you’re an ancient explorer on a world expedition. Since you have limited navigational & geographical info, there is a 50/50 chance you’ll end up in either the arctic or the tropics. What do you pack?

Well, with limited space on the ship, you’d want to pack items that’ll be useful no matter where you land. Water, food, medicine, maybe some rain gear, etc. (Rain happens everywhere, right?)

These are examples of No-Fail Bets.

I learned of the No-Fail Bet a few years ago, and I really like it as a tool for business strategy. This thought experiment helps leaders understand that even though we cannot predict the future with certainty, there are some actions we can take that will serve us well no matter what happens.

No-Fail Bets can help guide your career decisions too. If you’re interested in a career in investments, getting the degree in finance and working towards a CFA is probably a no-fail bet regardless if you work in Fixed Income or in Equities. 

However we need to be careful of overusing the No-Fail Bet – particularly when it comes to talent.

When you’re assessing other humans’ suitability for future conditions you cannot predict, you are inherently taking on some risk. You can’t guarantee that your bet won’t fail. And if you try to only bet on “sure wins,” you’ll severely limit your talent options.

We cannot predict the future. We all recognize this. But it’s far less often that we admit that a primary REASON we can’t predict the future is because we can’t predict the behaviors of those around us.

If you insist on only investing in no-fail bets when it comes to your talent pipeline, your pipeline will almost certainly fail. You won’t have a strong pipeline for your future business. You’ll only have a handful of “perfect” candidates…who will be in high demand and can often be very different to retain. 

The answer? Invest in your talent pipeline, and accept that each individual investment won’t always pay off. But over time, you’ll build a dynamic, resilient pipeline of growing individuals who are ready to weather whatever your business future may hold.