In her new book, Disrupt Yourself, Whitney Johnson argues that the principles from Harvard Business School professor Clay Christensen’s theory of disruptive innovation can also be applied on an individual level. Just as companies like Netflix created a new market before competing directly with (and ultimately disrupting) Blockbuster, individuals stand a better chance of achieving high status (and higher earnings) in their professions by taking a counter-intuitive path to success.
Johnson, a co-founder in Rose Park Advisors with Christensen, uses her own story—she landed a job as a secretary on Wall Street with no experience and a music degree, and eventually worked her way up to equity analyst—to illustrate how the S-Curve can be applied to individuals. Initially a disruptor enters the market in a weak position and largely stays under the radar, but over time momentum leads to hyperactive growth:
“I had no business credentials, connections, or confidence, so I started as a secretary to a retail sales broker at Smith Barney in midtown Manhattan,” Johnson writes. “It was the era of Liar’s Poker, Bonfire of the Vanities, and Working Girl. Working on Wall Street was exciting. I started taking business courses at night and I had a boss who believed in me, which allowed me to bridge from secretary to investment banker. This rarely happens.”
As an equity analyst at Merrill Lynch, large financial institutions routinely sought out her financial modeling, and one of the world’s richest men, Carlos Slim, even quoted her research at an investor’s conference. After 15 years, she left Wall Street to become an entrepreneur and co-found Rose Park Advisors.
When a person focuses on creating a new opportunity and acts more entrepreneurially—entering via the “side door”—she increases her chances of success, even though the decision may appear riskier from the outset. Without any direct competitors, she has time to gain ground and build her skill set (and other career assets, like relational capital) without constantly being in fight-or-flight mode.
“People are often poor judges of the amount of risk, and can be swayed by surface elements, such as ambiguity,” Ming Hsu, assistant professor at Berkeley’s Haas School of Business and Helen Wills Neuroscience Institute, tells Quartz. “So it is certainly the case that their view of ‘smaller’ and ‘larger’ risks are at odds with reality. … In the American workplace, we’re oversensitive to taking big risks.”
Hsu led a study that shows most people would much rather bet on risky outcomes (where the probability of any given outcome is known) than ambiguous ones (where the probabilities are not known). They discovered that there’s a specific neural response to uncertainty. “There’s a fear and alerting response,” he says, referring to the activation of the amygdala, which triggers the stress hormone cortisol. “Behaviorally, we sometimes pass up opportunities that are actually quite good because those signals might be subconscious and overweighed.”
As a follow-up study, Hsu and his colleagues looked at people who had brain damage to the areas that were part of the alerting response, and found that those individuals were more rational in their assessment of risk.
Even so, the average person’s propensities toward risk can be altered, he tells Quartz: “The good news is that cognitive biases can be trained away. We’re not just born with this disposition.”