Do you take a leap of faith or a measured risk? One implies fearlessness and the other exudes caution. Regardless, they both have in common an element of uncertainty. The question is what is the amount of ambiguity that you will tolerate?
In the early days economic schools emphasized minimizing risk and maximizing certainty. But how much certainty do we have these days?
When it comes to assuming risk, everyone has their own tolerance level. Some are risk averse while others are big risk-takers. The truth about risk is that it is an integral part of learning and leading. In order to learn and improve anything, you need to break free of the status quo and step outside the comfort zone you currently occupy. less risking stagnation.
How much risk are you willing to assume? Too much, and you compromise the desired outcome, and too little, and the needle never moves.
Getting Ready For Risk
There are ways to evaluate a risk and push yourself appropriately. Whenever you take a risk, there are some certainties with which you will deal. There will be discomfort, uncertainty, and an outcome (one way or another).
Broad in scope, these certainties can be managed if you follow the risk taker’s checklist below:
Assess the Inherent Risk. Risk is all about assessing the costs and benefits of any given choice. It’s like running an algorithm in your head. The brain computes probability of outcome based on information from the current environment and past experience. Each alternative is weighted based on needs, wants, beliefs and goals. Recognize all circumstances but focus on the ones with impact that will matter.
Leverage Experience. Experience plays a vital role in assessing risk. What is seen as risk changes over time. The more familiar you are with a situation, the more clarity you have, the better equipped you are for making educated decisions.
Adopt a Healthy Mindset. If we think about it, risk-taking happens every day from the time we wake to the time we lay ourselves down again at the end of the day. Too much risk aversion makes the brain work harder and leads to doubting our own self-efficacy.
Eyes On The Outcome. Like any business decision, you should have a sense for the way that this risk will affect your business. What is the desired outcome? If this doesn’t fulfill a goal or work toward your vision, then question the direction it’s taking you. A risk should take you toward something not take you away.
Expectations are Key
Think of risk taking as opening a door. What lies on the other side pales in comparison to what lies within. When faced with a situation involving risk, the learning signals in the brain are stronger. Dopamine, the feel good chemical that plays an important role in getting people to act, is released in proportion to one’s expectations. Stepping out in faith and experiencing unexpected positive results yields the most dopamine and gets the critical learning process started.
We need risk to grow. By engaging in measured risk on a regular basis you will get better at taking risks and changing your level of expectation. The goal is to manage the risks, no matter the size.