From smack-bang in the middle of the bell curve

Archive for June, 2012|Monthly archive page

What’s your margin for error?

In blah, life on June 4, 2012 at 3:50 pm

Picture a crowded street chock-a-block with vehicular and pedestrian traffic. Shouldn’t be too hard if you live in any major city in India. Vehicles honk and beep their way around the people, haphazardly parked vehicles, stalled tempos, customary branches embedded to signal larger than normal potholes. Progress is marginally faster than walking pace as the veins of traffic trickle in both directions. And every now and then a fresh obstacle brings the trickle to a halt, be it the inevitable fender bender or truck deciding to perform a multiple-point U-turn in the middle of it all. The already narrow space is now further restricted. Traffic slows as drivers need to factor in the reduced space through which to pass.

A combination of driving experience and spatial awareness helps you estimate where your car ends and therefore if it can make it through available space. Some drivers swoosh through the narrow space with coats of paint to spare, while others pause uncertainly. Urged on by the driver of the oncoming vehicle they inch their way through the space peering all around in trepidation until they finally clear the obstacle, their relief showing in the surge of acceleration that follows. Why the difference?

Most estimates of the space available would, I daresay, be similar. What probably differs is the perceived margin for error tacked on to that initial estimate. Meaning, if I’m confident of the space available to within a few inches, I glide through the space. If my margin of error is a foot, I’m terrified, as I inch through that same space.

And our internal “margin of error” calculator goes a long way in determining how we take our decisions. From estimating travel times to airports, to investments, to career choices. What time should I leave to catch the 8pm flight in peak hour and 15 kms to cover? What’s the minimum monthly income that can cover my needs for the foreseeable future? How many months can I go without a paycheck before I go under? What is the networth at which money ceases to be a factor in all my decisions?

I increasingly think most of us, when it comes to the big decisions, apply margins of error that are too wide, overestimating downsides, instilling hurdle rates that are too high, and in the process, closing off potential avenues of personal growth.  It will take a conscious effort of will to narrow that margin of error so that more varied options and choices stay longer on the table and in the consideration set.

And maybe a few scrapes on the car might not be the end of the world after all.

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