I Got This
Given the incessant thrum of disruptive change that we’ve seen recently, we could certainly use some help to deal with it. On the investment side, energy prices imploded, interest rates fell to zero, and markets went wild as a result. More broadly, we’ve seen non-traditional political candidates emerge, devastating terror attacks and shootings wrench our hearts open, countries nearly go bankrupt, and massive technology break-throughs change how we live our daily lives. At some point, you might wonder, how is it possible to cope with this seemingly endless assault on our established view of how the world is supposed to work?
It turns out, humans often find a way. I noticed a strange phenomenon within a few months of the economic crisis that began in late 2008. More of my acquaintances began diet and exercise programs, and were successful, than I can ever remember at any other time. Having experienced something external that shook their belief in financial systems, they turned their efforts to something internal that they could impact.
It turns out that this is not an atypical response. Establishing a sense of control can be a way to contend with chaos. By separating out the things in our life that are under control from those that aren’t, we get that sense of control back.
How often have you been stuck in traffic and decided to take a more roundabout detour just to feel like you’re accomplishing something? Like you are moving in the right direction? Like you’re moving in any direction?
I can remember a discussion with a division head after a market plunge in the 90s. “We can’t control what the market does, but we can control expenses. Let’s work on that.” In reality, expense decisions that late in the year had little impact on earnings. But monitoring expenses imparted a sense of control.
It could be that the recent Brexit vote in the UK (“Untied Kingdom” anyone?) may have simply been an attempt to express control, rather than an economic or political statement.
As far back as 1954, psychologist Julian Rotter developed a concept called “Locus of Control” to describe the extent to which we view ourselves in control of our world or whether things just happen to us. People tend to sit on a spectrum somewhere between internal (“I’m in charge of my life and what’s in it”) and external (“Hey, stuff happens”).
The concept of roping off those items outside our control is really just a subset of “mental accounting,” a technique by which we put things in different buckets. By having a bucket that is “safe” or in control, it’s easier to deal with the bucket that’s outside our control.
There’s a famous experiment in which subjects completed tasks while exposed to distracting noise. One group could press a button to turn off the noise and, as a result, had better results than the group that could not turn off the noise. Surprisingly, a number of subjects who had the option to turn off the noise chose not to and still performed better. The sense of control itself helped.
So, how can we use this technique to manage stress and uncertainty?
One way is the simple separation technique noted above. Stop trying to control what you can’t. Put it in its own bucket. Focus on what you can. My wife’s folks had it enshrined on their wall as an “Irish Serenity Prayer,” though I don’t think any one country can lay claim to it. You’ll recognize it by its reference to distinguishing between what we can and can’t control, and by its final phrase “and the wisdom to know the difference.”