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Trading Tulips: The Fallacy of the Herd Mentality

BrigadierGeneralMichelWhy staying true to yourself is crucial for leaders




“Collective fear stimulates herd instinct, and tends to produce ferocity toward those who are not regarded as members of the herd.”  Bertrand Russell

In the late 16th century, the Dutch tulip market was booming. Although tulips were a novelty for most of the world, they were one of Holland’s major exports and status symbols for wealthy families across Europe.

During the height of their popularity, tulips became so popular that people were making and losing fortunes literally overnight. In fact, at one time tulips were selling for as much as ten times the price commanded by Europe’s most skilled craftsmen. The reason for the rapid escalation in price, you ask? Simple—people began trading in tulip futures. In other words, many believed tulips were on an unstoppable trajectory of increasing demand and ever-escalating prices.

When the tulip bubble finally burst in 1637, fortunes were lost, lives were ruined and the world got a glimpse of what is now considered to be its first financial bubble. So what would make otherwise normal people seemingly lose their minds over tulips? The simple answer is they fell prey to herd mentality.

'Going along to get along'
Herd mentality speaks to the very human tendency to mimic or emulate the actions of other people. Of course, this isn’t always bad. After all, experience confirms the fastest, most effective way we develop and grow as leaders is by watching others.

The challenge arises, however, when we begin blindly accepting what we are seeing and hearing at face value. Instead of taking time to discern for ourselves the validity of what is unfolding, our desire to fit in leads us to all too easily trade creativity for conformity, promote average over excellent and settle for “good enough” when we are capable of so much more.

This is a particularly important point for leaders. Mindlessly "going along to get along" doesn’t really help anyone. In fact, it could actually erode a leader’s individual influence, diffuse collective potential, and undermine a group’s overall effectiveness. Think about it. As leaders we are called to inspire others to unite in a shared purpose or cause; to help create conditions that turn innovative ideas into actionable reality; and to inspire those around us to relinquish the safety of what they know so they can continue to act on opportunities that will help them grow.

Sadly, falling prey to herd mentality prevents all of this from occurring.  

Psychologists tell us there are two primary reasons human beings are lulled into adopting a herd mentality. The first is social pressure—more commonly referred to as peer pressure.

Given that we are social creatures, it’s natural we want to belong, to fit in. So we do things in order to be accepted. Whether it’s buying into the latest clothing trend or adopting the current hair style, the choices we make routinely stem from our unconscious desire for inclusion.   

The other reason we are so prone to follow the herd is we trick ourselves into believing “How could so many people be wrong?” Popular logic dictates that if so many people are doing something, it must be the right thing to do. Surely, not all of those people could be mistaken or misled.

Not so fast.

You see, the real danger of allowing ourselves to fall into the trap of unconsciously following the herd is that it quickly breeds mediocrity.  The more we settle for “going along to get along,” the more such thinking perpetuates fear, breeds self doubt, and promotes flawed decision making. None of which, mind you, help us effectively lead ourselves or those around us.

Fear of failure
Fear keeps us playing and living small. Instead of risking a move into uncharted territory that can stretch our abilities and help us discover the full range of our capabilities, fear tells us to do what is comfortable and predictable. The longer fear is permitted to have its way with us, the more we begin to question our ability to stand on our own. This allows self-doubt to creep into our minds and ultimately, into our lives—kick starting a negative cycle that erodes confidence and undermines competence.  

Finally, the more we allow fear and self doubt to influence our belief in what we are capable of accomplishing, the more flawed our decision making becomes. As leaders, this is where herd mentality is particularly destructive. Instead of making the decisions others are counting on us to make, we opt to defer, deflect, or all together deny making the tough call. More content with hedging our bets than taking new ground, projects go unfinished, expectations remain unmet and progress grinds to a screeching halt. We leave ourselves and those we lead paralyzed in place. Unwitting causalities of herd mentality.  

What is the simplest, most powerful way to protect ourselves from falling prey to this destructive tendency you ask? Simple. Remember that only one person truly knows what’s best for you. And you’ll find that person staring back at you in the mirror.

Of course, staying true to what’s most important to us isn’t always easy. Despite wanting to grow from our work and satisfy our innate desire to know that our work has value, the social pressure to conform remains strong. Making it all the more critical to reject the fallacy that because something is good enough for others, it should be good enough for us.

Today, almost 400 years after the tulip market crashed, the mere idea of flower futures seems preposterous. And although it’s very unlikely we will see a return to trading in tulip futures anytime soon, the social pressure to blindly follow the crowd has never been stronger. My hope for you is that you’ll trust yourself enough to set aside your fear, push back your self-doubt and decide to do what’s best for you. Even if it means risking finding yourselves out of step with the crowd.
 

John Michel is a widely-recognized expert in culture, strategy & individual and organizational change. The senior-curator for GeneralLeadership.com, he is an accomplished unconventional leader and proven status quo buster who has successfully led several multi-billion dollar transformation efforts. His award-winning work has been featured in a wide variety of articles and journals, including the Harvard Business Review, Huffington Post, Switch & Shift and the Washington Post. In addition to serving the nation as an active duty General Officer in the United States Air Force, John enjoys helping people learn to walk differently in the world so they can become the best version of themselves possible. You can learn more about John at his website, www.GeneralLeadership.com, or reach out to him on Twitter at @JohnEMichel.

 

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