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Nitin walked into our office for the annual financial plan review meeting, which is normally held after his annual appraisal. Seeing the glum expression on his face, I enquired cautiously about his annual bonus. Nitin mentioned a figure that exceeded his expectations, so I asked the reason for his long face. He explained that a close friend and colleague, Kamlesh, had received a significantly higher amount.
I was reminded of a dialogue from the movie 3 Idiots: “When your friend flunks, you feel bad; when he tops, you feel worse.” The character Farhan uttered these words after discovering that Raju and he were at the bottom of the class while Rancho had topped.
Professional rivalries are commonplace. The sporting rivalry between Cristiano Ronaldo and Lionel Messi has driven both to become better footballers, benefitting their teams and the entire sport. Such competitiveness is not limited to sports or offices. It’s evident in the grand weddings people host, which are often beyond their means, merely to signal their place in the social hierarchy. This inherent competitiveness is also apparent in “friendly” inter-group contests during corporate retreats and family outings, where nothing significant is at stake.
Evolution favours the spread of successful organisms through natural selection. Those better adapted to their surroundings are more likely to survive and reproduce. Evolution encourages individuals to be competitive and to aim for a higher position in the hierarchy, as such individuals get increased mating opportunities and preferential access to food, shelter, and other scarce resources.
This competitive streak, however, has both short- and long-term costs. Sometimes, this drive is tempered to account for short-term costs, such as the increased risk of injury from not allowing rivals access to mates, territories, or food. The dominant individual, or the contender, assesses the likelihood of instant success against potential injury, choosing either to fight or flee based on that assessment.
Evolution, however, often overlooks the long-term costs, especially if they manifest after reproductive age. High-ranking individuals face long-term costs like elevated metabolic rates and higher levels of stress hormones. They experience loss of body mass, eventual loss of rank, as well as shorter lifespans. Evolution tends to prioritise the immediate gains from competitiveness over these long-term downsides.
In today’s society, one sees many people indulge in extravagant holidays, weddings, and lifestyle expenses. Easy access to loans has amplified the propensity to spend lavishly. While such spending may temporarily shore up one’s social status, it compromises investments towards long-term goals such as retirement and children’s higher education.
Truth be told, there is no escaping the competitive streak inherent in all of us. However, only humans have the ability to counter this immediate, instinctual reaction. They can employ their more deliberate thought processes, as described in Thinking Fast and Slow by Nobel Prize-winning behavioural economist Daniel Kahneman, to assess both the short- and long-term ramifications of their decisions.
I emphasised to Nitin that his bonus had surpassed his own expectations, even if it was less than Kamlesh’s. I also reminded him of his decision a few years ago to opt out of the chief executive officer race to enable him to spend more quality time with his ageing parents and his spouse. Nitin cherished the moments spent with his parents in their twilight years. His bond with his spouse had also strengthened due to the increased time they spent together.
When he viewed the situation from this perspective, he felt less bothered by his lower bonus. I felt pleased I could guide him to “think slow” and recognise the beneficial trade-off in being true to oneself (like Farhan), rather than emulating someone else (like Rancho).
The writer heads Fee-Only Investment Advisors LLP, a Sebi-registered investment advisor
X (formerly Twitter): @harshroongta
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
(A slightly different version of this column first appeared in the Business Standard on October 23, 2023)