Sunday, November 2, 2008

Hope

In 1762, Sir Francis Baring, founded the Barings Bank. Originally called the “John and Francis Baring Company”, it was later to become Baring Brothers in 1806. After a very long and sometimes checkered history, including participation in the Louisiana Purchase and overexposure to Argentinean and Uruguay debt in 1890, it embarked on a path of fiscal prudence and caution so much so that it became the Bank of the British Monarchy.

Nick Leeson was a derivatives trader in Singapore for the Barrings Banks. While working at the Bank, Nick made a large number of unauthorized speculative trades which made some decent profits. However his luck turned and he soon started making errors and losses which he hid. Between 1992 and 1994 the losses had ballooned from 2 million to pounds 208 million.

In the hope that he would be able to recover these losses he placed huge bets on the 16th of January 1995 on the Tokyo exchange. However the Kobe earthquake of 17th January 1995 sent everything in a tailspin and the losses mounted to pounds 807 million, causing the bank to collapse.

Falsely relying on hope as a means to salvation was the end of Nick Leeson and the Barrings Bank.

"Hope is the most evil of evils, because it prolongs man's torment."

Friedrich Nietzsche

This sense of living on hope is not an isolated and rare event as it may seem. We are all prey to this phenomenon at various stages. When things are not working out or going wrong, we fall back on “Hope”. We hope that things will turn out right. We “Hope” that we will meet our targets. We “Hope” that the economy will be all right. We “Hope” that the boss will give a raise.

He that lives upon hope will die fasting.

Benjamin Franklin

The problem with “Hope” is that it lulls us into a sense of complacency. When a sales person sees a “Sales pipeline” he is prone to feel “Hope” that he will meet his target, little realizing that he has to be on guard, and that a sale is a sale only when the money is in the bank, not when he has got a letter of intent, nor when he has got a purchase order.

Hope can be a very disabling emotion. It “disables” action and weakens the effort. For success in any action we have to overcome “Hope” and rely on action.

“Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.”

Dale Carnegie
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Does “Hope” act as a disabling emotion? Does it lull people in a sense of Complacency?

3 comments:

Anonymous said...

Wow! Passively "hoping" for something will prevent it from happening. It's like "expecting" to win the lottery and never taking the initiative to buy a ticket. Let's not confuse this with "actively hoping" which requires some form of action to take place in order to achieve the expected outcome. To be a good leader, you must inspire "hope" in your team by responding to the current environment with empathy while still painting a vivid picture of what the future can be if everyone applies themselves. If you don't inspire those around you with a vision of what they are working towards, you don't give them the hope required to energize them into action. We need a few less "Eyores" and alot more "Tiggers".

Monica M Paul

Anonymous said...

If you are in some kind of predicament and there is no obvious road to solution, hope is a way of dealing with the problem without getting stressed or giving in to despair. If an opportunity arises, you will then be more likely to take it.

It may actually be a real survival mechanism: if you get injured in the middle of nowhere and you are in too bad shape to move / moving will make the injury worse, than hope that someone will respond to you missing can keep you alive a lot longer: stress increases blood pressure and will therefore more quickly drain internal energy. If you have an open wound, blood will flow out faster as well. Having hope will calm you down enough to keep your blood pressure low.

Being a survival mechanism, it does mean that it will mostly help you in the short term. So an issue that lingers on for too long may indeed lead to a kind of fatalism.

Calling it complacency is going a bit too far I think, but it can make the mind very lazy.

So far, complacent people I have met tend to have no need for hope, except perhaps hope for friends.

Anonymous said...

Faced with a difficult problem with no apparent solution, people tend to react in one of two ways: they cope, or they solve the problem.

- Those who cope tend to rely a lot on hope, as this is part of the surviving mechanism that will ensure they live with the problem while waiting for something to happen.

- Those who are problem-solvers will actively start to look for a way to resolve the problem, regardless of the restrictions of the system, how long it may take, or how unlikely the outcome.

By the way you word your question, I would think that you have only been in contact with the former?

Hope is not a "disabling emotion", it's an emotion that comes to people who are not able to form an action plan in a given situation. Problem-solvers will always try something to make things work.