Skin in the game

Exposure to your own downside

Skin in the game means bearing a real share of the losses from your own decisions, not only the gains.

Applying it means judging decisions and advice by:

  1. Asking what the decision-maker loses if they turn out to be wrong.
  1. Discounting confidence that costs its holder nothing.
  1. Structuring arrangements so that authority and exposure sit with the same person.

Discount every opinion by what it would cost its owner to be wrong.