“So why do you make money?”
My question is often met with a dismissive stare. As if the answer is so obvious, that the question isn’t even worth asking.
It’s one of the first questions I ask during my coaching onboarding process. Yet scrappy founders, law firm partners and professional investors – who typically don’t struggle for words – find themselves befuddled.
Then a light bulb goes off.
“Optionality. Money gives me tons of options.”
I’ve heard this answer enough to respond with a gentle dose of snark:
“You know you can’t eat optionality.”
The trouble with optionality
To set the record straight, I believe that collecting options (within reason) is an earnest life strategy. It drives sound career decisions like working at McKinsey, striving for that big promotion and getting a fancy MBA.
Yet optionality can be an easy cop out when trying to discover what you really want out of life.
In the fantastic essay, The Trouble with Optionality, Harvard Business (and Law) professor Mihir Desai describes the slippery slope of unconstrained option collecting:
The comfort of a high-paying job at a prestigious firm surrounded by smart people is simply too much to give up. When that happens, the dreams that those options were meant to enable slowly recede into the background. For a few, those destinations are in fact their dreams come true—but for every one of those, there are ten entrepreneurs, artists, and restaurateurs that get trapped in those institutions.
How can we ensure that our dreams don’t recede into the background?
The 5 Whys Process
Let’s turn to a problem-solving process from the famed Toyota Production System. According to Wikipedia, The 5 Whys Process is an “iterative interrogative technique” used to:
Explore the cause-and-effect relationships underlying a particular problem. The primary goal of the technique is to determine the root cause of a defect or problem by repeating the question “Why?” Each answer forms the basis of the next question.
Let’s take a sample automotive problem: the car will not start. Here’s how one could apply the Five Whys Process to identify the root cause:
Why? – The battery is dead. (First why)
Why? – The alternator is not functioning. (Second why)
Why? – The alternator belt has broken. (Third why)
Why? – The alternator belt was well beyond its useful service life and not replaced. (Fourth why)
Why? – The vehicle was not maintained according to the recommended service schedule. (Fifth why, a root cause)
So what on earth does this have to do with optionality?
$2,000 a month in passive income (Why?)
One of the steps in setting effective goals is understanding The Why behind a particular goal. During a recent RadReads workshop, one attendee shared a simple FIRE goal:
Generate $2k/month in passive income for 2021
But as he applied the 5 whys to this passive income goal, he was shocked by what it revealed:
Why? – I want to be free from working in the corporate world
Why? – I want to pursue my own interests without the worry of obligation
Why? – I want to be free
Why? – I want to have more time to explore myself
Why? – I have not had enough time to understand who I am
It turns out that his dream of understanding who he was had been overpowered by the machinations of generating $2k/month of passive income.
Start with why
The 5 Whys are a powerful tool in the journey of uncomfortable introspection. There are countless examples on the Internet of this process working its magic.
Curious about why you want to own your own business:
(FWIW, there are way easier paths to spending more time with your kids than starting your own business.)
Curious about why you exercise:
(For me, Crossfit was a vain attempt to combat my mortality.)
So back to optionality
So what’s the typical root cause driving my coachees’ pursuit of optionality: I want my children to be happy.
What a beautiful and worthwhile motivating force. One that makes life worth living. So as you apply the 5 whys to your biggest goals, please ensure that your “biggest dreams don’t recede into the background.”