Schrödinger's Cat Walked Into a Bar — And Didn't

The famous story of the boxed cat who is simultaneously dead and alive was first proposed as a thought experiment by Austrian physicist Erwin Schrödinger in 1935. The cat came to quasi-life as part of an argument between Schrödinger and Albert Einstein concerning elements of the Copenhagen interpretation of quantum mechanics.

No cats, of course, were actually injured in the making of this theory.

In his 1935 article, Schrödinger wrote:

"One can even set up quite ridiculous cases. A cat is penned up in a steel chamber, along with the following device (which must be secured against direct interference by the cat): in a Geiger counter, there is a tiny bit of radioactive substance, so small that perhaps in the course of the hour, one of the atoms decays, but also, with equal probability, perhaps none; if it happens, the counter tube discharges, and through a relay releases a hammer that shatters a small flask of hydrocyanic acid. If one has left this entire system to itself for an hour, one would say that the cat still lives if meanwhile no atom has decayed. The psi-function of the entire system would express this by having in it the living and dead cat (pardon the expression) mixed or smeared out in equal parts."

“Ridiculous” is the tip-off. Schrödinger didn’t want us to take the cat — or the argument — seriously. But if you move from the realm of quantum mechanics to the realm of our macro reality, Schrödinger's Cat is far from ridiculous: it’s our everyday experience.

Imagine a call comes in from Cat Rescue HQ. That Schrödinger boy is at it again, locking yet another innocent kitty inside that infernal device. As you load up the van, what do you bring? Well, that depends on the state of the cat. So you bring some food and medicine, or a cat carrier — but just in case, you need to pack a pet-size body bag and some disposable gloves.

Operationally, you treat the cat as alive and dead up until the moment the sad (or happy) truth is revealed.

That’s risk management. You have to plan and prepare for a range of outcomes, treating each as in some sense real until the state collapses and time’s final verdict is rendered. It’s seldom wise to believe in a single deterministic future.

The Fine Art of Making Bad Decisions

Butch Cassidy and the Sundance Kid are trapped on the edge of the cliff. “What I look at it, we can either fight or give. If we give, we go to jail. If we fight, they can go for position and shoot us, wait and starve us out, maybe start a rock slide and get us that way. What else can they do?”

“They could surrender to us, but I wouldn’t count on it,” replied the Kid.

Butch thinks for a minute. “Wait! We’ll jump!” It’s 300 feet down into rock-filled, treacherous waters. And after some argument ("I can't swim!"), both men eventually jump.

What kind of idiot makes a blind jump into uncharted waters? Answer: the one who’s otherwise dead anyway.

Making good decisions is easy. A good decision implies the existence of a good alternative, and anybody can do that. If there is a good choice, problem solved. But what if all your alternatives are rotten? Well, in most organizations, that gets kicked up the ladder. The higher you are, the nastier the choices that end up on your plate.

Actually, Butch and Sundance had a pretty easy choice: the certainty of death if they stayed, the probability of death if they jumped. Not a pleasant decision, but not a hard one. Real leaders have it worse. They have to choose among strategies each of which makes sense given a specific future. But the future is like Schrödinger’s Cat: depending on the actions of unknown random variables, the cat is both alive and dead until the moment the box is opened. The future become real only when it becomes the present.

Risk managers distinguish between the concepts of “pure risk” and “business risk.” Pure risk only contains a downside. If you didn’t get into a car accident yesterday, you’re not better off. You just failed to become worse off. If pure risk is avoided, it’s status quo. Business risk, on the other hand, combines threat and opportunity in the same decision. If you launch a new product, you might make a lot of money. If it doesn’t succeed, you’ll lose a bundle.

There are four parts of the business risk equation: the probability of the downside, the effect of the downside if it should happen, the probability of the upside, and the effect of the upside if it happens. In classical risk, you know the probability and the impact, so calculating the expected value of the decision is fairly straightforward.

What do you do when you don’t have the numbers? Try asking these four questions when evaluating potential bad choices:

1. What’s the best that can happen? (Can I make it better?)

2. What’s the worst that can happen? (Can I mitigate the impact?)

3. Is #1 worth risking #2? (Is the probability of one higher than the other? Is the impact of one higher than the other? Am I looking at an absence of good options?)

4. Can I live with #2 if it happens? (If not, do I have a less bad option available?)

The buck has to stop somewhere, and the available options may not be what anyone would prefer. Making bad choices is one of the unavoidable burdens of leadership. Do it as well as you can. That's what SideWise thinkers do.