Business – The Stockdale Paradox

Admiral James Stockdale became a US Prisoner of War during the Vietnam War after he was shot down over North Vietnam. He spent eight years at the notorious “Hanoi Hilton” POW Camp (Hao Lo Prison) where torture and brutality were a daily event. 

Over the period where the Hoa Lo was used, about 114 US POW’s died because of torture, disease and brutal treatment. As the senior-ranked US prisoner, Stockdale was subject to special status where his captors wanted him to appear on video praising the level of treatment afforded POWs at the prison. Stockdale went to the extremes of slashing his own face to deter these appearances. 

After he returned to the US, Stockdale was interviewed by Jim Collins, a leading business thinker of the time, who asked: “What was the difference between those that survived and those that didn’t?” 

Stockdale’s answer was surprising, hence the paradox, in that he said it was the optimists that didn’t survive. 

As a born optimist, I find that challenging. But it does go deeper. The optimists didn’t survive because their catchall was: “We’ll be out by Christmas”. But as each Christmas passed, their resolve went with it. In Stockdale’s words “they died of a broken heart”. 

Those that survived, however, were not pessimists, they were realists. They confronted the brutal facts of their current reality and survived it day by day. They took the actions they needed to stay alive. But there was something different about these realists as well. They maintained unwavering faith that at some time they would be free. Sound familiar?

In business, we are taking note of the Stockdale Paradox. We have positive signals and they have been happening for some time. And those of us working with business owners across multiple industries and markets know of the recovery. It’s happening! But many continue to be in a negative mindset. I can understand some of that sentiment – global crises and wars, US Politics, rain and flooding, Wellington’s poo, Auckland’s parking, All Black’s coaches – there are many issues and challenges we are needing to face. But aren’t these the facts of our current reality? Aren’t these the things that the “survivors” dealt with every day? Do we just need to harden up, show some grit and take those daily actions that will enable us to see another day? Easy to say, hard to do. But it’s a lot easier if we never lose sight of the fact that things will come right. Our economy will rebound (it has started to). Cost increases will slow down (they already are – Reserve Bank Governor). Wages will start to catch up (indelibly linked to productivity and the state of our economy, it’s on the improve). The sun will shine again (next summer!) 

The Stockdale Paradox is about business right now, and it’s about life too.