Essential 1 Skill 9 Be Ambitious but Recognize Greed

“You can’t have everything. Where would you put it?” Steven Wright 

Greed is Good (maybe)

“Greed, for lack of a better word, is good. Greed is right.

Greed works. Greed clari”es, cuts through, and captures the essence of the

evolutionary spirit. Greed, in all of its forms … greed for life, for money,

for love, knowledge … has marked the upward surge of mankind …”

Michael Douglas as Gordon Gekko

From the movie Wall Street, an Oliver Stone Film (1987)

The speech was memorable but there may never have been a more twisted use

of the word greed than Gordon Gekko’s slick pitch at a shareholder’s meeting in

the movie Wall Street. A stereotype for individual and corporate excess, Gekko

is as much the poster child for avarice today as he was in the ’80s.

#e following essay is a healthy reminder about ambition and greed.

Wall Street

In the wake of 2008’s economic meltdown, Oliver Stone released the sequel

to his hit movie, Wall Street. My friends and I decided to make a fun night of

movie-watching, analyzing both the 1987 original and 2010 sequel. Question of

the night: “Were ambition and greed somehow different in the ’80s from the

21st century?”

For those who need a refresher on the original Wall Street, ambitious but

naïve stockbroker Bud Fox (Charlie Sheen) enters a world of corruption when

he pursues a job working for his idol, corporate raider Gordon Gekko (Michael

Douglas). Gekko takes Fox under his wing, but only if Fox will provide illegal,

insider information. Enticed by big money, a trophy blonde, and a high-society

lifestyle, Fox succumbs to Gekko’s spell, the allure of power and profits.

Fox fails to see that Gekko is only using him to destroy Bluestar Airlines, a

company where Fox’s father works and the source of insider information Fox

feeds to Gekko. Once he realizes he’s nothing more than a pawn, Fox feels

remorse for the damage he’s done to those who trusted him, including his father.

In a watershed moment about greed, Fox pleads with Gekko not to break up his

father’s company and layoff thousands of workers.

Fox: “When does it all end? How many yachts can you ski behind? How much

is enough?”

Gekko: “It’s all about bucks, kid. The rest is conversation … It’s not a question

of enough … It’s a zero sum game. Somebody wins. Somebody loses. Money itself

isn’t lost or made. It’s simply transferred … from one perception to another …

like magic … the illusion has become real. The more real it becomes, the more

desperate they want it … Capitalism at its finest.”

Gekko’s calculated response wakes up Fox to the empty life he’s chosen. In

a last-ditch effort to set things right, Fox double-crosses Gekko but is detected

by the Securities and Exchange Commission for insider trading. Jail is the final

payoff for Fox and Gekko.

Fast Forward to 2010 >> time to see the sequel, Wall Street II, Money Never

Sleeps. By the time we left the theater, my friends and I were laughing our heads

off at how little things had changed since ’87. No need to spoil the flick for those

who haven’t seen it. Suffice to say, a Gekko doesn’t change colors easily.

Our conversation next turned to schemes of modern day Gekkos, alive and

well in the slick suits of crooks like Bernie Madoff. For anyone who missed the

broker crime of the century, Bernie Madoff was a modern-day financial advisor

who ripped off investors, charities, and the elderly to the tune of billions of

dollars. His Ponzi scheme had been going on for decades. Fortunately, Madoff

was exposed as a thief and jailed for life in 2009. In the end, my friends and I

drew a few conclusions about ambition and greed from the Wall Street movies:

! We all have ambition and that’s a good thing. The question is whether

goals are attached to values. If not, the worst-case scenario may cause

an ambitious Fox to sleep with a slimy Gekko. Scary crossbreeding!

# There will always be Gekkos and Madoffs in the world who screw innocent

victims out of life savings and then feel no remorse. We can only

hope the legal system works when these career criminals are exposed.

% None of us with a logical mind would allow greed or peer pressure to

interfere with honest ambition.

I then went home, turned on the television, and my new theories about ambition

and greed were turned upside down. What game show do you think was on …?

Deal or No Deal

As if back-to-back Wall Street flicks weren’t enough, the best lesson in greed came

later that night from a comedian, his banker, and their 26 girlfriends. Hopefully,

you’ve seen the game show Deal or No Deal. If not, I’ll summarize, then analyze.

The show started in the Netherlands in 2002 and was exported to dozens of

countries, including the United States. There are slight variations but I’ll stick

to the American version.

The game is a pop-culture phenomenon where 26 sexy girls in super-tight

dresses each hold a sealed, numbered case (1 through 26). Each case has a hidden

monetary value inside between one penny and $1,000,000 dollars. Follow the

player’s odds carefully — half the cases (13 of 26) range in value from a penny

to $750 dollars. The other 13 cases range from $1,000 to $1,000,000 dollars. 7 of

those 13 cases range from $1000 to $100,000 dollars. This means the first 20 of

26 cases have $100,000 dollars or less. Only 6 of 26 cases have $200,000 dollars or

more. Only 1 case has the million-dollar teaser.

At the beginning of the show, the contestant chooses a sealed case to hold,

and then begins opening the remaining 25 cases in rounds of 6, 5, 4, 3, 2, and

finally 1 case at a time. With each round, the odds of a contestant’s original

case having a high-dollar amount increases or decreases, depending on which

values have been knocked out. Between rounds, a cash offer is made to the

contestant. The game ends when the contestant decides to accept the latest

offer. In other words, the show isn’t about winning or losing — the contestant

is a guaranteed winner … it’s simply a question of how much.

Initial offers tend to be $10,000 to $50,000 dollars. That’s a great pay day but

no one ever takes the first or second offer. They don’t take the third offer either

because it’s rarely six figures. This means contestants must risk knocking out 18

of the 26 cases to shoot for bigger offers in the fourth round. The longer the

game goes on, the higher the risk of knocking out those big dollars.

It’s impossible to see what’s in the original case selected unless all offers are

rejected through six rounds, leaving just one other case remaining to compare

with the original selection. No one in their right mind does that without a safety

net of large numbers remaining, so no one ever has a reasonable shot at winning

$1,000,000 dollars. It’s not complicated. The odds suck against winning more

than $100,000 dollars. People try and often go home with less than $1,000 after

being offered $50,000 to $100,000 dollars. Hysterical, right?

Welcome to Psychology 101 — the game is really about risk-assessment under

pressure, or more accurately stated, “healthy ambition versus greed.” And there’s

nothing subtle about how the show manipulates the contestant — hot lights, sexy

girls, and a live TV audience. “Deal or No Deal?” asks host, Howie Mandel, as he

takes intermittent calls from his imaginary banker (a man who sits in a shadowy

cloak of darkness). The banker calculates odds and makes offers to contestants

between rounds.

To create added suspense, the show pauses so Howie and the contestant can

chat with friends and family members, asking if they feel the latest offer should

be accepted. Meanwhile, the audience screams for greater risk. “No Deal!”

As the stakes get higher, Howie even asks contestants if they “have the guts to

go all the way?” Hi there — you’ve just been called out in front of a national TV

audience. The shenanigans are all part of a clever ploy to play on the contestant’s

ego, greed, and emotions. Common sense is thrown out the window.

So what’s the real deal? On January 12, 2006, #e Wall Street Journal reported

several studies about Deal or No Deal, conducted by economists who assessed

decision-making under risk. The study revealed that contestants take greater

risk when they’ve already seen their highest offer go down, kind of like a poker

player who was up $10,000 dollars, loses half his money, then believes he can win it

back. Statistically, we know the longer a player stays in a game of risk, the greater

his chances of losing. But game-show contestants get greedy, just like gamblers.

Remember, the contestants on Deal or No Deal didn’t risk anything, so the idea

of winning back lost money is not the same as a gambler who started with his

own cash. Because the contestants are playing with the show’s money, their sense

of risk is diminished. The study even concluded the biggest losers rejected not

only good offers, but would risk everything to get closer to what the best offer

once was. Countless players turn down six-figure fortunes in hopes of something

better, but before the offers get too high, the number of cases remaining are

low. This means the odds are greater in final rounds that high numbers will get

knocked out, causing offers from the banker to plummet.

Should I go for $125,000 while $100,000 dollars is on the table, knowing the

next move could cost me $50,000 dollars? Smart contestants understand the

basic odds and quit before losing a great offer. However, emotional contestants

become pure gamblers and lose their minds. It’s funny to watch since the show

requires zero skill other than common sense.

One contestant was offered a choice to go for $1,000,000 dollars, having been

offered $603,000 dollars with only one other case remaining (the case with one

dollar). Sure enough, he gambled and went home with just a dollar. It was the

biggest bonehead decision in game-show history.

Ironically, my evening dissecting the two Wall Street movies ended up with a

deeper understanding of ambition and greed after analyzing Deal or No Deal. I

concluded that greed can affect virtually anyone the same way it does when Wall

Street tycoons play with other people’s money.

What lesson should we take away? Imagine a stranger comes up to you on the

street and offers $100,000 dollars. He then says, “Double or nothing. Deal or no

deal? You have 60 seconds to make up your mind.” Unless you’re independently

wealthy and can afford to lose a life-changing offer, don’t be a putz …

Take the deal!

“Ambition is the path to success.

Integrity is the car you drive in. Greed is the fork in the road.”

Cliff Michaels

Ambition is good but greed and perfection are not the smart entrepreneur’s

friend. This principle applies to building a career, negotiating a

contract, or running a business. It should also be of interest to those who demand

focus groups or heavy research to make even the simplest decision. I’m now

whispering to my MBA pals with the lovely spreadsheets and 100-page business

plans. In our zeal to know it all (or have it all), the competition can fly right by

us. So remember this credo:

Entrepreneurial thinkers are more concerned with doing than data.

No matter how ambitious you get, never let perfect ruin good.

[image error]

 

This blog is from a chapter section in…

The 4 Essentials of Entrepreneurial Thinking

Essential 1 – Skill 9 – Be Ambitious but Recognize Greed