In conversations with Fortune 100 senior executives, a common theme that came up was the importance of taking risks. Each executive credited much of their success to a series of risks they took in their career. Their stories not only challenged my personal view on risk but gave me some practical tips to become a smarter risk-taker.
Risk is typically perceived as a fear that requires a certain courageous personality to overcome. We are often categorized by ourselves or others as being risk-averse or risk-seeking and lead our lives accordingly. The risk-averse person seems destined to lead a stable but perhaps unextraordinary life while those who are risk-seeking will either crash and burn or be wildly successful.
Unfortunately, many people live according to their own risk profile, not realizing that they may be missing out on wonderful opportunities. By not knowing how to take smarter risks, you're likely limiting your potential. But how do you take risks in a way that doesn't make it feel like you're gambling with your life?
First, recognize that everything you do has risk - from crossing the street to texting to putting on pants (one of my toddlers suffered a torque fracture when he fell putting on his pants - *sigh*). We label something as "risky" when it is above our personal risk threshold. If the activity falls below this threshold, we see it as normal. Much of the advice we've heard centers around bypassing your threshold, which is a dangerous thing to do. "Just do it" may sometimes work out but can also be catastrophic especially if the risk is high.
To help bring to life the tips you're about to learn, imagine you are standing at the edge of a steep canyon and leaping across to the other side is the risk you would like to take.
Depending on your fear of heights, your experience with leaping across canyons, and other relevant factors, you have a personal threshold for how risky you think this leap will be. You can increase this personal threshold if you have a compelling reason for why you want to get across to the other side. For example, if it was just part of your vacation hike, your risk threshold might be much lower than if you were being chased by a bear. In many cases, the risk threshold you have is dependent on factors outside of your control such as the specific situation, your personality, other people's actions, etc.
To be a smarter risk taker, consider these 3 practical actions to reduce the risk of the task at hand to below your risk threshold:
De-Risk the Actual Task
Whenever you can, look to remove risks to achieving your outcome. If your goal is to get across to the other side of the canyon, you will want to walk along the edges of the canyon and find the area where the edges are closest together. You may also consider the possibility of building a bridge as opposed to jumping over. The idea is to find different ways to remove the risk you're seeing.
For a work-related example, if you're about to give a presentation at a high-profile conference, can you control where you are on the agenda so you're not following the best speaker or going right after lunch? Can you make sure you get in a day or two before your presentation so you won't be stressed with travel issues? Perhaps you can get an attendee list so you're not surprised by any unexpected senior leaders walking into your presentation and potentially rattling you.
De-risking is usually the most intuitive of the three tips so hopefully, many of you are already doing this.
Build a Safety Net or Buffer
In the canyon leaping example, the leap will seem less risky to you if there is a safety net below you.
To build your buffer, first identify what's at risk. What are you actually going to lose if this doesn't pan out? In many cases, you may realize that there isn't really much at stake.
For example, if you’re looking to join a startup after a 15-year career at a Fortune 50 company, what will you lose if the startup fails? Perhaps you might lose financially and have to worry about paying your bills and supporting your family. Maybe it will hurt your professional trajectory causing you to fall behind your peer group. Maybe your ego will take a beating when everyone judges your decision as stupid and reminding you of their advice not to leave your job.
Once you understand what is at risk the next step is to figure out how to protect against the downside of that risk.
Using the same example, if you’re worried about your ability to pay your bills and take care of your family, create a plan to save more and reduce living expenses so you can go for 2+ years without income. If you don’t want to lower your professional trajectory, assess how this startup experience can boost your trajectory even if the startup fails. Perhaps you can build a wider professional network or gain skills that you could not get at your current job. Another way to build a safety net is to either persuade your current company to buy the startup or start a similar division within your company. Lastly, as for your ego getting hurt, you might want to invest in other areas of your life so it won't be the end of the world if work doesn't go well. Being a part of an accomplished sports team or music group or coming home to a fantastic family can help you be more resilient. If you're afraid of your ego getting bruised, keeping your venture a secret from others can also help.
Increase Your Competence
If leaping is what you need to do to get across the canyon, the more skill and training you have, the less risky the task will seem. When you build up experience and expertise in the exact task needed, it won't seem as risky to you as someone looking at the situation without your expertise. A great visual example is the tight rope photo for this article. For an experienced tight rope walker, the activity depicted may seem less risky than to our untrained eye.
In a professional context, if you're thinking of taking a role in a different country, it's hard to not see it as risky if you haven't done it before. If this is a goal of yours, you may be able to reduce your risk by taking on a three-month international project or to work on a cross-border team. These experiences will help you understand the nuances of working effectively across cultures. You may also want to speak with others who have made this leap to get a road map for making the transition. Sometimes having a guide is enough to reduce the risk to below your threshold (for example - climbing Mount Everest).
Taking smarter risks is not about mustering the courage to "just do it". It’s about actively managing your relationship to risk. You can de-risk the situation, create a buffer to limit your downside, or train to increase your competence.
You can apply these risk mitigation tips to all areas of your life - career, relationships, sports, academic research, etc. It's generally agreed that more risk leads to more reward. By using these tips to take risks comfortably, we hope it will lead to a more rewarding life for you.
What's a risk you want to take but is right now above your threshold? Which one of these tips can you use today to bring you closer to taking a smart risk and live a life without regrets?
Photo by Leio McLaren (@leiomclaren)
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