How Risk Tolerant are You?

Seth Godin writes,

It's easy to to adopt the policy of avoiding risk at all costs, that whenever possible, the products you launch or the engagements you have should be flawless and without downside.

Here's the problem: in most endeavors, a small increase in risk can double the reward. It's the second doubling of reward that brings serious risk with it. But the first leap is relatively painless.

The point he makes is true, without risk there is no reward. The greater the risk, the greater the reward.  However, I don't think he has taken this idea far enough.

There is a powerful mythology shared by millions of people that says you can avoid risk and find safety, comfort and security. It is best expressed by those who resist change.

Risk is embedded in every act, decision, thought and encounter.

Risk is not just an issue of the size of reward. It is a core element in the opportunity factor that exists in every situation.

Ask yourself these questions:

Am I busy because I am trying to maximize the potential in every situation and encounter I have?
 
Or, am I busy trying to avoid risk and loss?

People who are too conservative in their approach to risk do not understand that they may be losing out on opportunities because they refuse to risk. People who risk everything for the sheer adrenaline rush of it may also lose through recklessness.

If we accept that risk is a part of everything we do, every day, it changes our perception of reality. It rids us of the delusion that safety, comfort and security can be gained without risk. It puts us in a mindset to be people who are looking for opportunities to take initiative to make a difference.

You can't decide, risk or not risk. Instead, you have to see the risk of acting or not acting in any situation.

To do this, you have to rid yourself of uncritically held assumptions about the past. You have to be clear about the impact that you want to achieve. You have to take charge of your own decisions, rather than simply going along to get along.

Ultimately, managing risk is managing our own tolerance for change. Accept change as a normal aspect of life, and risk takes on a different perspective. Resist change, and risk becomes a focal point for fear and indecision.

Comments

[David Pu'u]

What a mind and heart freeing piece Ed.

I have found that if I embrace risk, hold it at eye level, turn it, feel the weight, smell it, taste it, know it, that my chances of success, grow. It is a very similar process by which we come to know our God I believe.

Thank you for writing this and directing me to it.