We tend to view risk-taking as negative, but the reality is, in almost all instances as far as business and your career, you will need to take calculated risks for success.
Of course, in your life, you have to separate calculated risk from unnecessary risk.
There are plenty of examples of situations where risk isn’t a positive thing. For example, if you’re a risk-taker behind the wheel, statistically you’ll likely be in an accident. Speeding alone leads to more than 9,000 deaths a year in the U.S.
You have to separate these unnecessary risks from risks that could lead to success. The following tips can help you take calculated risks to get what you want in life, particularly when it comes to business.
What is Calculated Risk?
Calculated risk is what it sounds like—but you have to actually do the calculations for this to apply.
If you go with your gut, while it might work out, this is not a calculated risk.
Calculated risk means that you talk to experts, you get data and numbers, and you analyze numbers.
The goal is to be able to put an actual estimated value on both taking the risk and not taking the risk.
Otherwise, you’re taking a gamble.
Don’t Focus on Fear
Many of us feel fear about different decisions in our lives, but we let that fear make us think certain decisions are riskier than they really are.
That’s why calculated risk is so important—it allows us to take the focus off our fear and overestimation of risk and see what the level of risk truly is.
Of course, we need fear because otherwise, we’re underestimating risk, which can be even more detrimental than not taking risky opportunities.
You want to be someone who works toward balancing emotion and logic in every decision you make.
When you have an ability to balance emotion and logic, it strengthens you mentally. Mentally strong people are often the ones who are able to make their life and their business or career what they want it to be.
Be Critical of Opportunity
Sometimes we might inherently see all opportunities as something valuable and worthwhile, but that’s not the reality.
Every opportunity that comes your way isn’t necessarily right for you.
You should gather all the information and list the possible outcomes. For example, if you were to add a new product to your business, how might that mean you gain new customers, or that you can diversify your streams of revenue? What might the timeline look like with those opportunities?
When you take calculated risks, it’s highly possible that you’ll be saying no to good opportunities.
Again, not all good opportunities are ideal for you.
Expect and Anticipate Problems
With calculated risk, you have to know that problems are going to happen. It doesn’t matter how well thought out your plan is—problems will arise.
Rather than pretending like that’s not the reality, calculated risk means you anticipate these problems as much as possible.
Then, come up with different ways to respond to them.
As part of your approach to calculated risk, have a plan and strategy in place for every decision you make.
Outline what’s going to be done, by who and within what timeframe.
Be Flexible
As you do the above steps, you’ll have a defined strategy to approach risk. Even with that strategy, always be ready to change your course or pivot when necessary.
While any risk should be guided by goals and objectives, things change. If you’re afraid of change, then your calculated risks aren’t likely to pan out any better than if you didn’t take them, or were too risky.
As part of being flexible, have a way to do ongoing evaluations of risk.
Finally, be open to people challenging you across the board. If you’re someone who doesn’t like to be challenged or pushed to back up your decisions, it’s going to be a lot harder to make good calculated risks and to be successful overall.
You can even go as far as not just allowing people to challenge you, but asking them to do so.
For example, if you’re weighing a particularly risky decision, ask your partners or employees to come up with reasons why it won’t work. Then, you can get an even better idea of what your real risks are as you make the decision.
The importance of risk can’t be overstated in business, but as with anything, be smart with how you approach it.
Pinstripe Magazine Staff
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