October 3, 2012

The Reality Principle

I have learned through trial and error that the ability to see reality clearly makes all the difference in achieving desirable outcomes in life.  I call this “The Reality Principle.”

The Reality Principle states that you must have a clear perception of reality — what is — in order to make good decisions and get what you want.  It also states that you must accept reality as it is, warts and all, and make decisions based on it.  If you do not perceive reality clearly, or if you perceive reality clearly but refuse to accept it, reality will work against you automatically to cause you failure and bring pain.

When I review mistakes in my life, without exception what caused those mistakes was an incomplete or inaccurate understanding of reality.  A great example is losing $25k investing in X, a Vietnamese company with a smooth-talking founder.  I failed to understand or see reality clearly before I made the investment decision, and so it caused me pain.

It sounds easy to perceive and accept true reality.  But it isn’t easy at all.  The first challenge is understanding that your perception of reality is not the same thing as actual reality.  My perception of the founder was of a competent, smart guy with good experience.  My perception was wrong.  I discovered later that the actual reality was that the founder was financially inept but skilled at hiding problems.  He spent money so recklessly that he pushed the company into insolvency.

The second challenge is accepting reality for what it is instead pretending that reality is as you wish it to be (known as wishful thinking).  Human beings often willfully ignore evidence that reality is ugly or unpleasant.   Instead we put on rose colored glasses, imagine reality is the way we wish it were, and suffer from inevitable pain when actual reality crashes the party.

I made this mistake when I invested in X.  The founder of X originally was adamant that the minimum investment be $50k.  When I declined to invest $50k he lowered the minimum immediately to $25k.  After I agreed to invest the CFO emailed and called me nearly every day to ask about the money.  Although I thought that was strange I brushed it off.  I had made up my mind that this was a good investment.  I wished it to be a good investment.  So I ignored what reality was trying to tell me which later brought me pain.  After I lost my investment I learned that the CFO was pestering me for the money because X was already having trouble paying vendors and workers.

It’s easy to get caught up in our hopes and dreams and confuse wishful thinking for reality.  For example, say you have an employee who just isn’t working out after months of coaching and training.  You think “Just a little more time, just a little more coaching, he’ll get it!”

No.

If you have spent months coaching someone and they have shown zero improvement, the ugly and unpleasant reality is you made a hiring mistake.  The longer you ignore reality and pretend the employee will work out the more damage you do to your team.  Admit your mistake and manage that person out of your organization immediately.  The sooner, the better.

Be humble.  Know that there’s a lot you don’t know.  Seek truth and value it over your dreams and wishful thinking no matter how painful or unpleasant.  Follow The Reality Principle and make reality your ally instead of your enemy.

  • I wish I have the will to act out the actual reality when I realize it. Sometimes, your heart will cloud your judgement.

    • Yes. Seeing reality, accepting it and acting on it takes courage and will. It’s hard. It’s especially important for leaders — you can’t be a good leader without seeing reality clearly and taking reality-based action no matter how difficult.

  • Thomas Irre

    One to pin on the inside of my eyelids, Chris.

  • mark khan

    Great share! Authentic and can relate in many ways! Are you a candidate for US Business Ambassador to Vietnam 2015?

    • Thanks Mark! I like to think of myself as an American ambassador at large.

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  • Whats the significance of reality principle in decision making?

    • Understanding reality is critical to making good decisions. Making decisions based on wishful thinking instead of reality will bring you pain.