Clarity vs Certainty. Come on a Wonder journey with me:

Brian and I were discussing early thoughts around our 2026 strategic plan a few months ago – some of our ideas are big and scary and may not work. But I also know that we can’t keep doing what we are doing today and live great lives. We have survived this year, but I am interested in a better life than survival. And I believe in us and what we have built, and I believe that God didn’t bring us this far to only bring us this far.

Brian said to me in a moment of frustration, “You have an extremely high tolerance for risk!” as we were talking about potential directions.

I’m not entirely sure he meant it as a compliment – I think what he was saying is, there’s a good chance we could fail, and I’m not sure you really understand the risk.

I certainly wouldn’t describe myself as having a high tolerance for risk in general – I refuse to drive when the gas tank is below a quarter full. I travel with 3 suitcases because of every situation I’ve been in over nearly forty years of travel, and I want to make sure I am equipped to deal with whatever arises; my clothes each have about 5 different ways they can be mixed and matched, every pocket and spot in those bags is intentionally packed. My backup plans have backup plans.

Anyone who know us well would assume it’s the other way around – Brian has famously run out of gas more than once. His backup plan (wait, there was a plan??) is “it’ll all work out; after all, it always does!” His 3 suitcases have 18 belts, 20 pairs of glasses, some random shampoo, and no pants (slight exaggeration, but you get the point).

As you can imagine, this was a surprising comment to hear from him.

I started thinking about this: how do you assess someone’s tolerance for risk? The finance world understands this better than anyone.

How do you know if your tolerance for risk is, well, risky?

The fundamental definition of risk is “the possibility of an adverse outcome, such as loss, harm, or damage, due to an uncertain event. It involves the potential for negative consequences.”

As I listened to our executive team friends last week, looked forward to the strategic conversations with Brian this week, and thought about our meeting with a high-level leader of an international pharma company next week, it occurred to me that what we are really putting under the microscope is our tolerance for Clarity over Certainty. It was also tickling my brain that we seem to be hearing more from leaders about team members struggling with short term wins over long term risks.

Certainty guarantees that if you do A, you will get B as a result.

Brian is right that taking leaps in 2026 doesn’t come with guarantees. The uncertainty is high. We could fail.

I started wondering if there was a way to assess our Clarity – Certainty preference, perhaps using a Risk Tolerance tool for Executives. We talk to leaders about it a lot. Surely there was something out there that would give us a quantifiable report to look at our partnership and suggest ways to work well together through the uncertainty. Telling people, “You need to act with Clarity not Certainty” sounds great, but is it actionable? Brian is a great leader with what would seem like a high tolerance for risk, yet in this moment, with something so pivotal, he was focused on the uncertainties. Understandable, of course, and we went on to talk about the Stockdale Paradox, believing with absolute faith in the future while acknowledging that the worst could happen.

But what could I take from this moment to help others with big decisions?

The biggest ones have a high risk of catastrophic failure, but someone chose to move forward anyway.

Think about Elon Musk. I remember arguing with Brian twenty years ago that Elon was going to change the world with the Tesla. Brian’s point of view was that Americans would never drive an EV or take the concept seriously. What Elon was trying to do was legitimately crazy – there hadn’t been a new breakthrough car company in decades, and a startup EV company would be crushed by the establishment, even if he could find buyers. What started as a niche product quickly converted people to EV lovers.

I can point to all the other things Elon has brought the world: reusable rockets, the Dragon space capsule, Neuralink, Optimus, etc. All high risk. I remember how gleeful some people were when the first reusable Falcon rockets exploded. And the people who mocked him for having the audacity to think he could solve brain injuries with implants. Last week, I watched a video as the newest recipient who has been paralyzed for decades was able to feed himself with a robotic arm with the use of his new implant.

Thankfully for humanity, Elon has a high Risk Appetite. I’m sure that makes it hard for most people to be on the journey with him. I suppose he has a pretty good track record by now, but the Starship test that ended in an explosion this summer shows you how many people are waiting on the sidelines to judge you for failure.

What makes a person like Elon have a high Risk Appetite? What keeps most leaders trapped in a low one? What does that mean for decision-making? For Wonder and Invention conversations? How does it impact Discernment? Especially if a Discerner has a low Risk Appetite. What does this mean for perfectionism and fear of what other people think?

So I went on a search to see what exists out there to help people assess something like this. I may very well be missing something, but even with a deep search, the best I can find is Risk Tolerance questionnaires for financial planning.

I’ve also learned quite a bit about Risk Appetite vs Risk Tolerance. Risk Appetite is basically how much risk you are fundamentally willing to accept to be in business. Risk Tolerance is how much you are willing to deviate from the appetite to achieve a specific objective.

Let me give you a practical example:

Speeding creates a risk for other drivers on the road.

To manage (mitigate) this risk, states create speed limits.

A speed limit is the Risk Appetite.

Let’s say that’s 70mph on a highway.

There are tradeoffs to a posted speed limit: on an empty I-10 flat highway, a 70mph speed limit is keeping someone who could safely drive much faster from reaching their destination more quickly.

As a society, we have agreed that trading off faster time to arrival is a good exchange for shared road safety and fewer accidents.

Now, let’s say on that same highway in the same conditions, completely empty, you go 10mph over the speed limit – after all, there’s no one around but you, and you aren’t going to hurt anyone but yourself if something goes wrong.

If you happen to drive past a patrolling cop in those conditions, you are highly unlikely to be stopped. You aren’t endangering anyone, and the hassle of doing the paperwork and showing up for court for a one-off small overage is not worth it for the officer.

This is Risk Tolerance.

However, I bet if you were going 100mph, you would be pulled over and ticketed even if you were alone on the road. You would be exceeding the amount of Risk Tolerance the officer felt comfortable accepting.

Risk Appetite or Risk Tolerance

Turns out, what Brian was really saying is that I have a high “Risk Appetite”.

And buried somewhere in this thought process is the role of Courage – which, as my Grandpa Heidrich who was a decorated WWII Marine and survived the worst battles in the Pacific Theater told me, “Courage is just showing up.”

Showing up despite the fears, despite the uncertainty, despite the potential for catastrophic failure. Those things are real and still exist. Showing up says I’m going to give it everything I have, not sit on the sidelines, not be passive. I’m going to show up, give it my everything, believe in the future, and live with joy.

Because the real failure would be not showing up at all.

My working theory: Risk Appetite + Courage = Risk Tolerance

I don’t know what that means in terms of what we could turn this into for our clients. But I think there might be something useful buried in here, perhaps the germ of an assessment that we could build.