Defined games vs. Contingency games: navigating career expectations

Different stages in your career call for need to play different sets of games for progress, maximising your odds of cumulative success

Photo by ANIRUDH on Unsplash

A career is a 30-40-year journey with rewards and penalties all along. I never gained that perspective early in my career. Anyone easily persuaded me to do something different and something new. At times, I would catch myself valuing other’s experiences more than mine. Soon, I realised that this chase of looking on someone’s turf was not really getting me anywhere.

Different career stages call for different approaches (different games to be played) to build a holistic career. Sometimes, we solve for stability and certainty, sometimes for a higher reward-effort outcome. A lot depends on where we are on our journey. Today, we talk about the two games we often play in our lives and the different rules that govern outcomes in each - I call them Defined and Contingency games (Lucky outcomes)

Defined games are where effort required to achieve results ratio is fixed at the start. It goes by the straightforward principle of Do X and Get Y.

• The ratio of this E/ R is precontracted when setting up the game, and the level of uncertainty is well-understood from the get-go.

Result (R) is a function of Effort (E), Knowledge (K) accumulated over time (T)

R = F( E*T, K)

• Defined games allow for the accumulation of success over a definite period. It can have a compounding effect of effort over time if the E/R ratio is contractually changed periodically. (through promotions, change in R&R)

• These games are iterative. It provides a great place to learn and grow skills as it enables one to practice and perfect specific skills due to the iterative nature of the game. Thereby allowing for a cumulative skillset improvement.

• These games don’t reward exponentially better performance. The 99% percentile effort is usually defined and capped by the linearity of the reward; that’s because defined games don’t appreciate the exponential effort of getting from 95% - 99% percentile performance.
  (Picture borrowed from Mitch Turk’s post on self-driving cars - check if out here)

  

Contingency games as the word suggests operates in world of probabilistic success. It’s the same difference between finite and quantum world - let me example what that means. These games have an unknown relation of effort/ result, and can only be quantified in post-analysis of experience.

• Successful outcomes in these games are governed by a power law, which means very few of the games result in exponential gains, while most showcase no meaningful results.

• A contingency game is a dynamic situation game, where beyond just the effort metric (E), one needs to change direction and react to what I call external volatility (V). It’s like a quiz where the exam question changes while you write the answer; can it be stressful? Here is my attempt to correctly represent the equation

• Effort doesn’t guarantee outsized returns, as no defined path to success exists. If the path to success is clear and prescribed, then the market will price down the excessive returns.

Result (R) is a function of Effort (E), Knowledge (K) accumulated over time (T) while solving for changing market conditions (V)

R = F( E*T, K) ^ (1/ V)

• These games are cursed by survivorship bias, meaning that the documentation and history of the winners are always remembered and spoken about more than all the buried stories of failure in the quest of winning.

• Unlike defined games, the compounding effect of particular skill forming is less prominent. There is an opportunity to become a broad-based thinker before becoming a vertical expert due to the changing nature of new realities that keep setting in.

• The exponential nature of the game rewards incremental efforts (moving from 95%—>99%) more exponentially (just like the exemplary side chart above explains)

• You are lucky in the game if you can afford to play it and are not priced out. In the context of a career, that means effort, capital, risk-ability and even location.

• All contingency games will one day become defined games, but their ability to create exponential impact will also drastically reduce.

So, we now have gained some ideas for these two sets. Let’s talk a little bit more about transitioning from one to the other. In my experience, the most challenging transition for executives is for those moving from defined games to contingency games (read: startups) cause the rules of the engagement are very different and require a tough reset. When playing the game of probabilistic success and undefined problems, the most significant input factors contributing to success are the number of attempts (experiments) without running out of resources (avoiding the risk of ruin), which might not necessarily confirm the operating dynamics of a defined game setup.

I hope this sheds some light on which games you are playing today in your career, but the bigger question still holds - how does one choose which is more suitable for their long-term success?

That is a million-dollar question we all want to answer one way or another! Isnt it? If you are on the same discovery - let’s connect! Until then, I hope you enjoyed this one!

See you in two weeks!