Chicago Booth Review Podcast What a Missing Cat Tells Us About High-Stakes Situations

Lisa Stefanac: And I'm on track towards what I think is the right way to behave, which is different from the way he saw as the right way to behave, and to recognize both as being valid. So that is the first step, and it is hard when things are hijacked to recognize that.

Hal Weitzman: When things get challenging at work, how do you change your behavior? Does the stress show, or do you remain cool, focused, and productive? Welcome to the Chicago Booth Review Podcast, where we bring you groundbreaking insights in a clear and straightforward way. I'm Hal Weitzman, and today, I'm talking with Chicago Booth's Lisa Stefanac about how to handle high-stakes situations.

Lisa Stefanac, welcome back to the Chicago Booth Review Podcast.

Lisa Stefanac: It's so good to be back. Thank you.

Hal Weitzman: We are delighted to have you back, and we're here to talk about how people behave in high-stakes situations. What do we define as a high-stake setting?

Lisa Stefanac: It's any kind of setting in which there's significant consequences to safety, to career, to reputation. The more or the greater the potential impact, the more likely your stakes are going to be high.

Hal Weitzman: Okay. What would you say to someone who thinks, "Everything I have is high-stakes. Everything affects my reputation and my career." What would be an example of a real high-stakes situation?

Lisa Stefanac: A real high-stakes situation? I would encourage it something that is surrounded by urgency. So deadlines, that might be the reason why everyone says everything is high-stakes for me, so deadlines. It could be during a time of risk or uncertainty, transition, having a new baby or moving to a new job. This can be high-stakes. There's also emotional or psychological urgency or intensity that can cause high-stakes. So interpersonal conflict, which we've talked about in the past. And yeah, I would say that's what would define it.

If you want a specific example, in the workplace certainly is when something unexpected happens in the market. There's a big turn, and there has to be an instant response. I would say the Silicon Valley Bank crisis that happened, that was in 2023. That happened overnight. That created high-stakes right there in the moment.

Hal Weitzman: Okay. I'm just thinking, because sometimes the advice that you get is to contextualize what feels like a crisis may ...

Lisa Stefanac: Sure.

Hal Weitzman: ... will anyone care in five years time? The idea being to minimize-

Lisa Stefanac: That doesn't help in a moment of crisis for any one person because high-stakes can be perceived. And I think that's the key is that if you're, or somebody you know, a coworker is in a feeling of high-stakes, the perception of that high-stakes or the reality, it feels the same. So to say, "Oh, this will all be over in five years."

Hal Weitzman: Calm down.

Lisa Stefanac: Yeah, that is never the thing to say, and I'll say that later.

Hal Weitzman: All right, I'll remember that. Okay, all right, I want to hear more about that. So we're in a high-stakes situation. How does that tend to change the way that we behave?

Lisa Stefanac: Usually what happens is the behavior intensifies or tightens. There's a level of narrowing of view. This probably comes from our age-old amygdala hijack that can happen of like just narrow-view escape. It's a survival mode, to some degree.

But behaviorally, there's a number of things that can happen. We tend to move from a cognitive flexibility to something more rigid and more reactive. And when it comes to the reactivity, there's tends to be two different modes that we can be in. One that's more heroic mode that can actually end up being really productive where we fix the problem, go after the issue, and just right away and be in fix mode, can be in a space of protecting people. And there can also be that stable mode of endure and just lock in, everything's going to be fine and really believe it, and others orient to that like a lighthouse in the storm.

Then there's more the shadow modes. And the shadow modes are where we're probably speaking today, is more in the space of attacking a person, whether it's verbally or we can get into more of the physical that can happen, but coming at someone, there can be a kind of victim-accuser or blame that'll end up happening, more of in a resistance space, or there's total withdrawal. I might still be in the room, I might still be smiling with you, but I am not here, I have gone.

Hal Weitzman: Okay, far away. Mentally on the Caribbean beach. Hoping to be.

Lisa Stefanac: Maybe so, but mainly just checked out, I am done. Usually the phrase I'm done.

Hal Weitzman: So sounds like something not dissimilar to kind of fight, flight, freeze, that kind of framework, right?

Lisa Stefanac: Correct, yeah, yes.

Hal Weitzman: So it's interesting you mentioned evolution because I wonder how deep these behaviors go. So if we choose one of those, or we don't choose, but we behave in one of those modes, how does that behavior change tend to affect the situation? Does it raise the stakes or does it make them seem higher than they really are?

Lisa Stefanac: So here's the thing about behaviors in high-stakes, everyone has different stakes-raising themes. What might raise the stakes for you might not be an issue for me. I think about all the flying I do. I see visible discomfort when there's turbulence around me. Not a problem for me. In fact, I kind of enjoy it. So we have-

Hal Weitzman: You enjoy turbulence?

Lisa Stefanac: I do. It's kind of fun, you're riding a wave.

Hal Weitzman: Okay, good for you.

Lisa Stefanac: So that is an example of differences among what raises somebody's stakes. So what might raise the stakes for you is not going to raise for me or vice versa. So tends to be, if my stakes are raised, it's really the behaviors I do out of having raised stakes that could then cause other people's behaviors, or sorry, stakes to be raised as well. That's the issue is that usually when our stakes go up and we have the more shadow-mode behavior that is happening, that tends to trigger people into their own stakes-raising themes and unproductivity and engaging.

Hal Weitzman: So the boss who kind of shouts and screams when things go wrong, when there's the equivalent of turbulence ...

Lisa Stefanac: Correct.

Hal Weitzman: ... then other people behave in this ... or they accommodate that? What do they do?

Lisa Stefanac: Again, it's about skillset first and fore ... Well, it's about acknowledging and understanding your own stakes-raising themes, and so raising awareness. We'll get to this probably of what you can do differently or how you can prepare for this, is even just being aware of what raises your stakes.

But in a moment in which a boss shouts, and I think about instantly an infamous moment, a famous story about Steve Ballmer when he was president and CEO of Microsoft, he was famous for this one moment where he literally threw a chair in the office, he was very upset, but that is violence. If you think about it, there is something physically being thrown and think about anyone in the room that may have grown up or had been surrounded by physical violence growing up, that could be a stakes-raising theme. And so suddenly where they might have been calm, if he had just raised his voice, suddenly with the violence or the throwing of a chair, and now that person has moved into one of these shadow modes as well. And then usually that pops other people too. So it usually can be a cascade, unfortunately, of creating more stakes in the room, higher stakes.

Hal Weitzman: Okay, all right. So it can obviously ... I mean, that makes sense, right? I mean, if your boss throws a chair in the conference room, you would think that the stakes are pretty high.

Lisa Stefanac: I would know that I would be pretty concerned and probably freeze in that moment.

Hal Weitzman: Right, yeah, so we'd all behave differently, like you say.

Lisa Stefanac: Yes.

Hal Weitzman: So I know that you have a personal tale about these different kind of behaviors.

Lisa Stefanac: I do.

Hal Weitzman: And how the situation can turn into a high-stakes for one person and not for another.

Lisa Stefanac: I do.

Hal Weitzman: And it has to do with a cat.

Lisa Stefanac: And indeed it does. A cat named Brittany, a beloved cat named Brittany. I had a dear friend who got the fortune of being invited through her company to go and spend a year abroad in Singapore, and she had an elderly cat named Brittany. Brittany was 13 years old, and my friend was very concerned about bringing a 13-year-old through the whole process of traveling to Singapore, going through customs. She asked me if I, as a good friend, would be willing to have Brittany for a year.

Here's the thing about Brittany: Brittany was declawed, 13 years old, and had never left the home. She was an indoor cat as a result of being declawed. Well, I said yes. However, I live in the woods in California amidst a ton of trees and lots of animals, and I was concerned, would she actually want to stay indoors? It's a very enticing outdoors through the window. Well, my friend confirmed, no, there's no way that she would want to go out.

Within three days of having this cat, somehow Brittany escaped. She got through a door that was partly open, and she was gone. So imagine, I'm in charge of this sweet slip of a cat, four pounds, by the way, and I've only been in charge for three days, I'm supposed to be there for a full year. My stakes go way up. What do I do? I go into the heroic mode of fix. I start calling around all the neighbors, "Hey, heads up about my cat." I'm shaking the treats. I am already calling humane society, "What do I do?" I'm in full on fix mode as all full of action.

Meanwhile, my husband sits down on the couch and says, "The cat will come back." And that's it. That's all he says. So he was more in that sturdy, endure place, the cat will come back.

Well, unfortunately, usually when there's a clash of these heroic modes, there might then be a pop-up into that shadow-mode behavior. And of course, yes, I got into an attack: "How dare you sit on the couch? You're doing nothing yet again." And there was a lot of exchange that way.

Needless to say, by the end of the day, the cat actually did just come back, so he was absolutely right, but there was definitely a clash between us in our modes of how to engage the crisis, and it amped up into more of a shadow behavior on my part.

Hal Weitzman: So if he had behaved differently, even if he thought that the cat would come back. It sounds like ...

Lisa Stefanac: If he just helped me in my fix mode, I would've been absolutely happy.

Hal Weitzman: ... if he behaved, then it would've not raised the stakes further, perhaps.

Lisa Stefanac: It raised the stakes further for me to have one less person soldier on the road to help with this.

Hal Weitzman: And we've all been in that kind of situation. So what is the general lesson from that story?

Lisa Stefanac: General lesson, first and foremost, is catching myself in the moment in which my stakes are up and recognizing my vision just got narrowed and I'm on track towards what I think is the right way to behave, which is different from the way he saw as the right way to behave, and to recognize both as being valid. So that is the first step, and it is hard when things are hijacked to recognize that.

And at the same time, it helps to be in a place of presence on a more regular basis such that I can tell when I've been hijacked in some way that I can calm my own system down and interpersonally be able to engage in a way that deescalates. So that would've been the best way to handle the situation. There's a few other ways we can get into later.

Hal Weitzman: But I'm just wondering, in that case, I mean, the cat was fine, thankfully, but it might not have been the case.

Lisa Stefanac: Indeed, and I was doing all the things that was going to help.

Hal Weitzman: Right. This is a cat that hasn't been out before.

Lisa Stefanac: Ever.

Hal Weitzman: So you might say, the story might have been that your husband said, "You're right. Let's go out and look for it," and you found it, and thank God everything went well. So the lesson might have been that you had to act. It could have been a very different lesson.

Lisa Stefanac: It's very true, it's very true. And so both actually existing at the same time, I do wish that he had helped me in my acting. And at the same time, both, it turned out he was right, but yeah, I'm glad I had also acted. I don't think I could have ever sat on the couch and just wait.

Hal Weitzman: Right, right, right. Okay, but I'm just wondering, but next time, what would you do differently?

Lisa Stefanac: Next time I would, as I say, just acknowledge and see where my reaction is getting hijacked and be in a space of problem-solving and naming, "This is what I'm going to do. What are you going to do? Okay, you're waiting and you'll be by the door in case you can spot her. Okay, great." So I take advantage of probably him sitting and having a clear eye to the door, but I would absolutely have slowed it down. And I think that's what often happens is we speed up, and when we speed up, that's when it gets more narrow, more rigid, and absolutely potentially pops us into that shadow behavior.

Hal Weitzman: If you're enjoying this podcast, there's another University of Chicago Podcast Network show that you should check out. It's called Capitalisn't. Capitalisn't uses the latest economic thinking to zero in on the ways that capitalism is and more often isn't working today. From the morality of a wealth tax to how to reboot healthcare to who really benefits from ESG, Capitalisn't clearly explains how capitalism can go wrong and what we can do about it. Listen to Capitalisn't, part of the University of Chicago Podcast Network.

Lisa Stefanac, in the first half, we talked about the story of a missing cat and what it tells us about high-stake situations. No, but very instructive actually in many ways. We've all been there where we are charging ahead with something. We feel that somebody else isn't doing anything to help out, and it sort of raises the stakes.

So let's translate that to a corporate setting, and we're thinking about corporate crises. And I know you have a lot of experience working with energy companies.

Lisa Stefanac: Correct.

Hal Weitzman: Tell us about energy companies and how you've faced crises situations, how you dealt with them.

Lisa Stefanac: Well, in particular, the one that I want to highlight is the Deepwater Horizon drilling rig that had an explosion in 2010. This was with BP. It's quite famous from a standpoint of level catastrophe. So if you think about something like that happening, think of a leadership team, right away, Tony Hayward, who was the CEO of BP at the time, and all the team, there's an alert, this is happening, and then comes what? And I think that's the key is that pause, as I mentioned earlier, can you slow down enough? Yes, instantly be able to react, but react with choice and not be reactive.

And so what ended up happening, on one end, and just to be clear about this catastrophe, 11 people passed away, were killed instantly, and then there was almost three months of an oil spill in the Gulf of Mexico. So you can imagine the fallout in so many ways across all the ecosystems.

And so while there was a rapid response in deployment of resources in order to work quickly in trying to contain at least the danger, and there was a quick engagement with government authorities, with Coast Guard, et cetera. What ended up happening though is that there was also a lack of transparency.

And maybe there was an element of not knowing enough as well, but there needed to be a lot of communication outward, particularly to the constituents and all the individuals that were going to be affected by this oil spill and across governments.

There was also deflection and blame. So in fact, contractors were blamed in that moment. That's what I meant by earlier that when stakes get really raised, a lot of times, there can be a tendency to get into this kind of victim-accuser space where, "Oh, no, it's not us, it's them," and finding this blaming without actually the ownership or the sense of transparency about what actually is happening.

And then the final thing that happened is there was a few Tony Hayward CEO missteps, particularly a very famous line in which he said, "I want my life back." And it showed up as a sense of total detachment and lack of empathy with the situation.

So again, to be very fair, this was probably one of the highest stakes in any kind of business and particularly in oil and gas, lives are on the line, and the most catastrophic thing happened. And at the same time, there is that moment of noticing yourself in the raised stakes and being more choiceful and also, can you presence yourself sooner? Can you as a team determine together what actually is needed right now instead of being in a reactivity space and starting to point fingers?

Hal Weitzman: So there's so many things going on there in that example that I would love to press on a little bit more. So one is about sort of communication, communication with stakeholders, with government, with the media, and everything else. And internally, I'm guessing as well, and with contractors and these other people, we talked about the blame game. And the other one is sort of energy companies, when things go wrong, they really go wrong. Hopefully, nothing goes wrong with an energy company, but when they go wrong, it's often a big deal. And you sort of think they would have a plan for that, and that plan would supersede any emotions or changes in character that you see. So why doesn't that happen?

Lisa Stefanac: Well, there are always plans in places. The scenario planning is any energy company or a mining company, anything where there's going to be heavy machinery of sorts, yes, planning and then acting are very different. You can go through simulation, and certainly, there is that opportunity. Think about NASA and all the ways in which they do simulations for the moment in which there might very well be that crisis on board. So there's planning, and then there's the moment of acting.

I think about, and that comes down to the person, the person and in readiness, both in their emotional capability to hold steady. And when I say emotional, it's also just being able to maintain presence, be at one's best in the face of what's coming their way. So this is where it comes down to leadership, because you as a leader, yes, you might've made a plan on paper of step-by-step of what happens. And in a way, that's helpful, because actually in crisis, you do need to get narrow in step-by-step safety, particularly when safety is on the line. It is important to go step-by-step as quickly as possible on what the things you need to shut down, start reaching out to, talk to stakeholders, et cetera.

When it comes to the method of delivery, when it comes to the actual way you hold yourself, now we're in the territory of leadership. And in that territory, that comes with years, moments now, and moments of low-stakes to medium-stakes in which you're practicing, how do you hold steady? And when you don't hold steady, what is it that knocks you off center? So it goes back to being able to be aware of the stakes-raising themes in your own life. And also more importantly, how do you manage the stakes-raising themes for others? How do you manage people when they are in high-stakes? So as a leader, I'm both managing self and then helping to manage others.

Hal Weitzman: Okay. And I was going to ask you when there's these crises moments that people ... Well, I'm guessing it varies, but what kind of people tend to calm the team down, and what kind of people tend to wind them up? I mean, is it-

Lisa Stefanac: What kind of people? I don't know about kind of people. It's personality, to some extent. So there are people that get into crisis management because they have always been good at holding steady in the storm. That's that lighthouse in the storm kind of analogy or the rock in the storm.

Hal Weitzman: But is that what makes you a leader? I mean, if you're the bomber type who tends to respond to situations by getting stressed and throwing chairs, does that automatically mean you're not going to be a good leader?

Lisa Stefanac: So what I would define as a leader is one who will be willing to own the consequences of one's actions and to engage toward creating a deescalated situation in a crisis, if we're talking about crisis or raised stakes.

So in that moment of Steve Ballmer, if he had gone into chair throwing, okay, yeah, that's going to cause a disruption among everyone else, it's what he does next. Is he there to own to say, "I just did that. Let me check in with each person. How was that for you? I want to apologize or I want to engage. How did you feel? Let's contract differently"? If he were to have owned it, that's going to be, in my eyes, more of a leader than one who ignores and just thinks with power that they could just move on without addressing.

Hal Weitzman: Okay. So in the example of Tony Hayward, the BP boss, when he said that famous line, "I want my life back," that was just emphasizing how he wasn't taking ownership of it at all.

Lisa Stefanac: In that moment, and to be fair to him, as it progressed, he did then take ownership and apologize and engaged in a number of high leadership ways. And so to that extent, I applaud how he ended up hearing and responding to the reaction.

When there's impact, an impact, whether it's crises and it's a life lost or whatnot, that's the moment also of how do you show up with empathy to even acknowledge the part that I've played. But in high-stakes, sometimes we can instantly get into behavior where it's blame, the blame game, and complete withdrawing from the crisis.

Hal Weitzman: Okay. I want to turn to thinking about practical advice for people who are listening to this.

Lisa Stefanac: Sure.

Hal Weitzman: So first of all, how do we recognize if we're in a high-stake situation?

Lisa Stefanac: Well, it starts with what's going on in the body. Physiologically, you can recognize when your heart is starting to beat fast, sweating, sweaty palms, the dryness of mouth. I mean, certainly, our bodies tell us first when there's something that has shifted from or on a physiological standpoint.

The other thing too is, again, as I say, it might be a perceived threat, but the body knows no different. So the first thing is to notice one's body, that is a data of right there, and then you can make a choice in that moment. When it gets to be such high-stakes that the amygdala has now been hijacked, there's an opportunity at that moment to have already, hopefully, practiced skillset of how to bring yourself back into a steady state. Usually, deep breaths, something that allows you to choicefully be able to return to center.

Sometimes what helps for me, certainly, is going on a walk. A lot of times in that rigidity, if I stay stable, I get even more entrenched and heels dug in versus going on a walk, particularly with whatever person or persons that I am in this together with, that can help.

I would say, other things that you can do is contract ahead of time with people that are surrounding you. So knowing, and this is what I offer to anybody listening to this, is that knowing when and how stakes could get raised and how I tend to behave, and more importantly, what I need from others when they see my stakes go up, that's the moment ahead of time to be contracting with your team members. What are their stakes-raising themes? What do they need in that moment? Sometimes people just need to be left alone. Other times, people need to vent and be able to blame all they want, but in a safer space, not out into the public.

Hal Weitzman: I see. So then you could actually just say to people, "Can I vent for a bit?"

Lisa Stefanac: Yes.

Hal Weitzman: Or, "Can you please leave me alone or whatever?"

Lisa Stefanac: And ideally, contracting ahead of time, because otherwise, you might not be the person I should be venting to. You might be actually ... that could raise your stakes even more when I suddenly talk about all the things that I think are wrong.

Hal Weitzman: Okay. So it comes down to knowing yourself. It sounds like mindfulness.

Lisa Stefanac: Yes. So it is an aspect of mindfulness, for sure, in leadership. The other piece around leadership, and what I long share is what I think is the start of leadership, is the ability to assess yourself while you're in action.

Ron Heifetz at the Kennedy School of Government at Harvard will say this as being up on the balcony. Can you assess yourself while you're actually on the field in the game? And even more complex with leadership is can you assess yourself and others while on the field in the game, and then make changes and tweaks in the motion of that act?

Hal Weitzman: Okay. Now, I mean, we're often in a situation where other people, we're not the Ballmer, we're watching the Ballmer, we're in the room with that person.

Lisa Stefanac: Yes, managing others.

Hal Weitzman: Not to pick on him too much, but there's people who express their emotions very strongly or their behavioral changes. So how would you advise people who ... I mean, I feel like we've all probably worked for someone who's a bit like that. How would you advise people to treat those situations when somebody else is changed their behavior significantly?

Lisa Stefanac: Yes. So I'll go back to the three different shadow modes, so attack, resist, and withdraw. And resist is like the victim-accuser kind of space, the blaming. So in attack, if somebody is on the attack, I won't mention this person we keep picking on, but the thing that you want to do in that moment, the stakes are up for them. That is not the moment ever to say calm down to somebody in attack. They will meet that and give even more attack.

The other thing not to do is attack back, because the attack has an energy suck and it wants to just take what you've just given and blow it back to you even more. So these are things not to do.

So what to do, almost like in aikido, allowing that energy to go by and just understand, "You know what, I'm going to be a boat in this situation and let that water just flow on by instead of have it stick to me." So that's one of the first things to do.

Also, it helps to keep asking what else? What else is bothering you? What else is going on? That way that waterfall just keeps water flowing until it's been expended. So that's what I would encourage you to do with attack.

When it comes to those in the resist pattern, that victim-accuser blaming, the thing to do is get them into walking. I mentioned that that helps for me, is to get into a state of walking, ideally, side by side and also recognize that their initial resistance of no is going to happen. So allow the no, and then just keep asking. So what if, what if? And that would allow for them to start to wonder the what ifs with you, but allow that no to be the first thing that you hear.

And then the final one, withdraw, this is the person that's just like, "I'm done," is in their head. You absolutely have to give them space and time. The moment you come at them, they're going to withdraw even more. So it's a tendency for us when we see withdrawal. Anyone who too sees withdrawal is wanting to go toward. That's the moment to not go toward. Allow them space and time. And usually, what I'll do is I inquire into what matters most to them or even inquire, "What about the situation is turning you off or that you're feeling a need to pull back?"

Hal Weitzman: Okay, good advice. Lisa Stefanac, thank you so much for coming back on the Chicago Booth Review Podcast.

Lisa Stefanac: Thank you for having me.

Hal Weitzman: That's it for this episode of the Chicago Booth Review Podcast, part of the University of Chicago Podcast Network. For more research, analysis, and insights visit our website, chicagobooth.edu/review. When you're there, sign up for our weekly newsletter so you never miss the latest in business-focused academic research. This episode was produced by Josh Stunkel. If you enjoyed it, please subscribe and please do leave us a five-star review. Until next time, I'm Hal Weitzman. Thanks for listening.