In June of 1876, a regiment from the 7th Cavalry of the United States was in a conundrum.
Scouts had found a large encampment of Native Americans along the Little Bighorn River in the Montana Territory. This tribal encampment violated laws confining Native Americans to reservations. And the 7th Cavalry’s mission was to force them to comply.
Relations between native tribes and United States Army installments in the region were not good. Several skirmishes had broken out between the two already, and the 7th Cavalry had every reason to believe this encampment would be hostile to their demands.
And so, the regiment’s leader – Lieutenant Colonel George Custer – charted an attack. The Cavalry would be split into three brigades, encircling the encampment. The troops would trap the natives into compliance.
It was a bold strategy, but also a risky one. Custer had no idea how many warriors might be among the tribe, and how those ranks compared with his own. He also knew far less about the terrain his regiment was on than the natives.
By pressing ahead, Custer was taking a chance. And anyone who’s taken an American History class knows the rest.
The first brigade got bogged down by Lakota Sioux and Chayanne warriors just as Custer’s brigade was trying to flank the encampment. Native warriors spotted Custer’s men and attacked them with superior numbers.
The brigade had nowhere to retreat to, and not enough firepower to press on. It was systematically cut down. Every member of its five companies – including Custer – were killed.
The Battle of Little Bighorn was effectively over. But the legend of Custer’s folly was just beginning.
For generations, Americans would hear of Custer’s Last Stand. It was the ultimate cautionary tale of risk gone wrong.
Why would Lieutenant Colonel George Custer attempt such a bold maneuver? Why would he so unabashedly put the lives of his men in danger?
Military historians have been trying to answer this question for decades. For Custer wasn’t exactly a novice when he reported to the Montana Territory. He was an accomplished military leader who had led Union Army brigades in the American Civil War.
The volunteers under Custer had repelled Confederate forces at just about every turn, including the Battle of Gettysburg in July 1863. He knew what he was doing.
Or did he?
You see, at Gettysburg, Custer’s volunteers faced off with a Confederate cavalry force twice their size. Custer’s brigade was somewhat detached from the heart of the Union Army, and the Confederate cavalry caught him by surprise.
Undeterred, Custer led counterattack after counterattack with his own cavalry. The vicious fighting stalled the Confederate brigades, effectively preventing them from rendezvousing with other columns of fighters.
Once the cannon fire of the main battle could be heard in the distance, the Confederate cavalry retreated. Custer had won.
Custer had taken a massive risk exposing his cavalry so extensively. The chances of them getting overrun were as good as them prevailing.
It was effectively a coin flip. But the coin came up in Custer’s favor. The risk paid off
This certainly gave Custer confidence. Confidence to assume even more risk.
That attribute was what allowed him to rise to the rank of Lieutenant Colonel, and to get posted to the Montana Territory. And it’s likely what made his daring plan at Little Bighorn seem anything but.
Live by the sword. Die by the sword.
Call it The Custer Bias.
Lieutenant Colonel George Custer met his demise nearly 150 years ago. So, why discuss his travails in such detail.
Well, I believe they’re just as prescient in this era as any other.
We are a far different country now. A global superpower, fueled by big business.
But today’s industrial leaders are just as happy taking risks as Custer was. If not more so.
This sustained boldness perhaps most notable in big tech, where companies can shift from hypergrowth to cost cutting on a dime. But it’s also present in manufacturing, thanks to the rise of just-in-time inventory processes. It’s present in retail, where large brands venture into new product lines or sales channels time and again. And it’s present in dozens of other industries.
There are many reasons why this behavior is so present among corporate leadership. Many have pointed out that investors don’t stand still. And neither do competitors.
That’s all accurate. But the biggest reason leaders lean into risk-taking? It’s The Custer Bias.
Think about it. Just about any corporate leader has already taken a risk to get where they’re at. Maybe they were an entrepreneur, who defied the odds to found the business they now helm. Or perhaps they rose through the corporate ranks, trying something bold to fuel their breakthrough.
With those bold moves in their rearview, these corporate leaders are keen on rolling the dice once more. For all the market forces out there – consumers, competitors, investors – are yearning for them to push the envelope.
Of course, it could all go sour. And if it does, they could lose everything they’ve attained.
Such an outcome would sting. But not as much as the status quo does for others.
It’s easy to idolize the maverick leaders. To deify a Steve Jobs or a Howard Shultz or a Reed Hastings.
But for each one of them, there’s someone who failed at their mission. Someone who took a risk to create a tech company, or revitalize a small coffee shop, or disrupt the entertainment industry. And someone whose risk didn’t pay off.
These failures lurk in the shadows. You can’t prove a negative, and we have little patience for tales of what could have been.
And so, we comb through the success stories. We search for patterns and commonalities – all while forgetting about the inherent randomness.
Yes, success can seem inevitable if you weed out the duds. And that delusion can make risk-seeking appear less dangerous. Safe, even.
This is undoubtedly a tragedy. Not perhaps not in the way you might think.
Those burned by a risk gone bad will surely suffer – regardless of whether it’s the first or fifteenth risk they’ve taken. But those who avoid risk will suffer even more.
For there is no safe passage for the risk averse these days. Those who play it safe will still find themselves under the direction of renegades.
They’ll find themselves reporting to dice rollers infested with The Custer Bias. In this modern era, how could they not?
Yes, it is all too possible to stay away from the fire and still get burned. But what if that such a fate wasn’t so inevitable?
It’s time to turn the tables on The Custer Bias. To be less cavalier with the risks we take. To pay more credence to the odds of chance. And to avert our eyes from the shine of favorable outcomes.
Such actions run counter to our nature. But they’re essential to our survival.
So, let’s stop following the path of Lieutenant Colonel George Custer. Our story deserves a better ending.