Here’s what I don’t get. Why did Elon paint himself into a $44 billion corner by buying Twitter, an amount that he now admits was too much? What prevented someone as smart as Elon from pausing to reflect before purchasing and say to himself, “Hold on, let’s re-think this deal”?
Deal Fever
“Deal fever” is what some call the tendency of people to overvalue the company they’re competing to acquire. It’s as if the rational, unemotional self evaporates, and a commitment to the deal drives irrational behavior to close it. Deals like the Twitter acquisition are competitive and time-bound, where the shot clock only adds to the witch’s brew of deal fever.
But who was Elon competing with to acquire Twitter?
I’d argue that the competitor he needed to beat was his more rational self, the side of him saying, step back, hold on, and assess this decision.
To recognize his rational self, Elon would have had to sit with his ambivalence. Sit with the tension of not knowing. He would have had to play it out both ways: what buying Twitter might look like and what not buying Twitter might look like.
Instead, he ignored the competing voices of his internal conflict and listened to only one voice that said, “Buy now!”
To be fair, he did reflect on his ambivalence and tried to back out of the deal, but by then, it was too late. As he mentioned in this BBC interview, he went through with the purchase believing he’d lose the pending court case and be forced into the acquisition.
Ambivalence is having simultaneous and contradicting attitudes or feelings toward an object, person, or action. It’s like feeling attraction and repulsion—at the same time.
Reckoning with ambivalence means sitting in the middle of your two (or more) sides, and listening to both voices. Let them play out in stereo. There is new information in the ambivalence, but you have to listen for it.
This can be uncomfortable. To sit in the middle and listen to—and feel—these sides is a place of tension. It can be tempting to ward off one side of the conflict and sequester it into our unconscious. Like Elon, we may “put it all on black” and embrace the chosen side with vigor and certainty.
Elon’s leap into a decision to close might feel like a triumph against vulnerability and loss. But, in fact, he may actually be planting the seeds of defeat. Psychoanalysts call this a manic defense. D.W. Winnicott described manic defense as a way to reassure ourselves by a flight to the opposite feelings. For example, confidence against ambivalence, joy against sorrow, or grandiosity against self-defeat.
I can’t help but wonder what the Twitter deal symbolizes for Elon on a personal level. What was he defending against as we watched the very public and chaotic acquisition unfold? Loss? Mourning? Mortality?
The Defensive Maneuver
While the term manic defense originates from psychoanalytic theory, this coping mechanism can manifest in the business world as:
Excessive optimism
Overconfidence and grandiosity
Risk-taking and impulsivity
Workaholism and relentless high-energy
Avoidance of vulnerability and introspection
Remember, all of these behaviors, emotions, and mental processes are in the service of the same thing: protection. The manic defense keeps us from feeling our deeper and often heavier emotions.
Manic defense is a temporary triumph over ambivalence. Underscore temporary.
The Power of Playing It Out
There’s data in ambivalence, and using it is part of the mature, nuanced thinking that leads to better decisions. If we struggle with a decision, we can use our imagination and envision how things might turn out. Psychologically-minded business leaders often do a “pre-mortem” with their team before starting a big project.
In the pre-mortem, the team pretends things went horribly wrong and map out the details of that imaginary disaster. This opens their minds to see the risks they hadn’t considered in the decision-making process. Then, they reel back time to the here and now, applying these learnings to pending decisions. Pre-mortems are a way of tapping into hidden ambivalence.
Warren Buffet uses his ambivalence as information in decision-making to play out different outcomes. He and his partner Charlie Munger embody disciplined and dispassionate decision-making. At the 2023 Berkshire Hathaway annual meeting, Warren talked about admiring Elon’s aspirational accomplishments but, at the same time, described Elon’s fanatical and tortuous approach to business and life, which came with a high failure rate.
Now imagine Elon’s pre-mortem about buying Twitter. What could he have learned? What might he have avoided?
Whether you’re facing a business or personal decision, I offer this: take the time to acknowledge the full range of your thoughts and feelings. Focus on the ones you don’t want to face. Can you feel them and name them?
Engage your imagination and do a pre-mortem as if your decision or plan has failed and you’re looking back on why. What could your future self have done differently? Then, reverse engineer and do those things now.
Stacey really useful . Really enjoy your articles.
This article is highly relevant in today's fast-paced “one click” world. I thoroughly enjoyed reading it .