This week’s America’s Got Talent featured the second group of twelve from the Top 48 contestants. Most of the acts were pretty underwhelming. A common refrain from the judges was “You were so good, fresh, unique and exciting at your audition. What happened?”

I think that what happened might have been something that happens in organizations all of the time. It is illustrated in Amos Tversky and Daniel Kahneman’s famous study called “The General’s Dilemma”. Here’s the scenario:

Imagine that you are a General and you are surrounded and being overpowered by a superior enemy. If you don’t act, all 600 of your troops will die. You send out two scouts to find a way out.

The first scout tells you that if you take his route, you will most likely save 200 soldiers. The second scout tells you that if you take his route, there is a 1/3 chance that 600 soldiers will be saved and a 2/3 chance that none will be saved. Which route do you choose?

If you are like most people (about 80%), you would probably choose the first route. However, what if the choices looked like this:

The first scout tells you that if you take his route, you will most likely lose 400 soldiers. The second scout tells you that if you take his route, there is a 1/3 chance that no soldiers will die and a 2/3 chance that 600 soldiers will perish.

If you are like most people (about 80%), you would have selected the second route (note: this would work only if you hadn’t already seen the first set of choices and made a decision).

If you look closely, you’ll notice that in terms of the number of people surviving and dying, the two scenarios are the same. Yet, depending on how they are presented, people will make opposite choices.

The conclusion of this research is simple and somewhat intuitive; people tend to avoid risk when they have something to lose but are willing to take risks when they have nothing to lose. The way that the scenarios are phrased primes your brain into a nothing or something to lose situation.

So what does this have to do with America’s Got Talent or your organization? The contestants on America’s Got Talent have little to lose during the auditions. They know that their chances of going on to the next round (or winning) are pretty slim (scenario two in the General’s Dilemma). As a result, they tend to take more risks, put on edgier performances, and often wow the judges (at least those with talent). As they move closer to the million dollar prize they begin to have something to lose (scenario one in the General’s Dilemma). As a result, they often start to play it safe and work within their comfort zone. Not surprisingly, the winner of AGT and other talent-related reality shows are often those who overcome this bias and continue to push and take risks even as the stakes get higher.

The same thing happens in organizations. Many large, successful companies often find themselves adopting a more risk-averse stance as they try to protect their position and status. Companies that continue to drive forward and stay on top are the ones who continue to innovate and take chances (e.g., Apple). Those who play it safe in order to protect their lead often find that their competitors, who have much less to lose, catch up to them very quickly with new innovations and ideas.

Finally, this happens with individuals as well. How many “one-hit wonders” has your organization had? These people do some incredible work and have a meteoric rise to the top but then stagnate. Often this is because they are trying to repeat and re-use the ideas that fueled their success. They often miss the point that while the ideas were good, it was their attitude, aggressiveness, and willingness to take a chance that got the result. The idea was just a by-product.

Take a look around your organization and your people. Which scenario best describes your situation? Are you in a good position with a lot to lose if things don’t go well? Or, are you in a position where the sky is the limit? If it’s the former, be careful that you aren’t creating more risk for yourself by avoiding risk in the first place.

Tips for avoiding the risk-averse culture trap:

1) Celebrate success and positive press but don’t make it your goal to obtain them. Instead focus on outcomes that will continue to drive your business forward.

2) Be cautious of arguments against new ideas that focus more on the chance that you’ll lose your position and less on specific things that might go wrong.

3) When you reach the top, redefine your world so that you are back on the bottom and have something to grow into (e.g., If you are the best cookie company in the world, redefine your company’s success relative to the dessert industry).

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Brad Kolar is the President of Kolar Associates, a leadership consulting and workforce productivity consulting firm. He can be reached at brad.kolar@kolarassociates.com.