Is Risk-taking is mostly Due to Hormones?
Picture a young couple driving on a cliffside road, with the man driving. They come by a slow-moving car, and wish to overtake it, but a truck rapidly approaches on the oncoming lane. Rather than wait, the driver accelerates, and narrowly overtakes the slower car, while the truck honks furiously.
While the man gets a dopamine surge, and feels on top of the world, his partner is mortified, and tells him not to take such risks. Testosterone distorts one’s RRR (Risk Reward Ratio). Greater risks are encouraged, as they lead to much greater thrills.
A quick look at prison statistics in developed countries would show that in America, 93% of prisoners are male, and a majority of these are under 35. This is mirrored across the globe – India’s prisoners as of 2020 were 96% male, most of them being in the 18-30years age category. A majority of women in prison are there as accomplices of crime by a man.
A big contributor to this statistic would be that men on average have 20 times the testosterone of women, and younger men have a larger amount of the hormone than aging ones. Parents dread teenage years of their children, as this is a rebellious phase. This is especially true for boys aged 13-18, as testosterone is at its highest levels, and one has not yet learnt to temper one’s thinking.
Adapting Modes of Risk
Human beings, or at least half of them, have always been aggressive risk-takers, just channelled in different forms. From our caveman days to more recent times of conquerors, Mongols, Vikings, pirates, grave-robbers, pillagers, to modern times of drug dealers, bombers, arsonists, murderers, rapists and more, some factor has always driven human beings towards aggressive risk-taking behaviour, often culminating in what we label today as ‘crime’.
As we have moved from physical to digital, so has risk-taking. Over the past two or three decades, one would’ve witnessed a surge in risky business behaviour, i.e., soft or white-collar aggression. Banks have often been labelled as casinos. Whether with high-frequency trading, excessive leveraging, derivatives and options trading, or something outright illegal, like Enron, Madoff, Mossack Fonseca, or Mallya, businessmen have not suddenly developed an increased appetite for risk but have simply adapted their hormonal pangs to changing times.
Natural Selection
Nature’s primary objectives are reproduction and survival. To this end, nature has always made it clear that one male is enough for many females. In most animal species, males fight each other, often to the death, to earn the privilege of being ‘head of the pack’, primarily for mating purposes.
Through this method, nature selects the best males, and ensures that testosterone-fuelled aggression and risk-taking do minimal harm to the rest of society (females, young ones, older males).
Sexual cannibalism, where the female kills the male post reproduction, is common in species such as spiders (hence the moniker ‘Black Widow’), insects such as praying mantis, scorpions and others.
One lion, bull, or monkey is enough to impregnate hundreds, and achieve nature’s objectives.
Human society, inspired by nature, has also encouraged this philosophy. Men have had a disproportionate share of traveling, exploring, conquering, fighting, killing, dying, or going bankrupt, while women and children remain safe at home, as a part of society. In earlier times (and in some parts of the globe, even today), society allowed one man to have multiple wives, or concubines.
While society positions this approach as ‘male superiority’, this is in truth ‘survival of the fittest’, where males who err in their thinking and decision-making due to a rush of hormones, are eliminated, and a select few survivors are given the privilege of ‘leadership’. This is done in a manner that prevents aggression and risky behaviours from spilling over to an otherwise peaceful society (which largely consists of women, children and older men – the survivors).
Applicability to Business Leadership
Leaders of large businesses are generally older (above 50), with less testosterone to cause rash decisions. This is similar to a general of an army, who ends up taking the final call. However, functional heads — those in the ‘line’, or even entrepreneurs, are often younger, and have more testosterone to spend, similar to point-men on the ground, in a war, who do the actual fighting. Business plans require a large amount of quantitative and qualitative thinking, which successful people at all levels are good at. However, testosterone-fuelled risk-taking and aggression can cause serious distortions in judgment and clarity of thought. At best, this can lead to value destruction, in the form of a failed business. At worst, it can lead to financial irregularities and legal/regulatory risks.
-TOI Edit