Walking out of your house is a risk. So’s bungee jumping. Risk is everywhere so, how do winners and successful people do it? How do they measure and manage risks?
As someone who’s been in the digital marketing, copywriting, and content marketing business for more than two decades, it sounds a little off when I say ‘I don’t take risks very well’. But it’s the truth. I don’t.
The only time I gambled is during Chinese New Year when I felt ‘obligated to’ as a gap-filler or mood-maker to join my family. You know, to make up the numbers, raise the stakes, and add to the usual celebratory fanfare.
What I can personally get behind is actually Calculated Risk.
Like, I don’t mind getting on roller coaster rides but I’d rather not play casino games. I take on businesses and projects when I know I have the wheel and am confident about what I can deliver. Even then, some of those risks don’t work out well for one reason or another. But that’s just life.
When you look up what ‘risk’ is, Investopedia has this to say.
“Quantifiably, risk is usually assessed by considering historical behaviors and outcomes. In finance, standard deviation is a common metric associated with risk. Standard deviation provides a measure of the volatility of asset prices in comparison to their historical averages in a given time frame.”– Investopedia
Anticipating the Occurrence of Risk is Essential
When you’re offered a project/job, there’s a risk that things won’t work out. Chances are, things are going to go wrong along the way. Managing risk is anticipating the occurrence and knowing what to do about it.
In fact, it’s risky even when you’re just making dinner (just a moment ago, I sliced my thumb cutting up a watermelon – lol). Or when you get out of the house for work or to the grocery store.
The risk of being involved in a traffic accident is higher than you think no matter where you live. Even if you’re a defensive or careful driver. That’s because you’re not thinking of the number of reckless ones out there.
Life is not completely in your control, that’s why.
There’s always some sort of unsettling uncertainty in everything that we do. You could lose your passport to a theft situation in a foreign country. You could lose your wallet while eating out with your family. Your computer could die on you all of a sudden.
When the risk is staring you in the face, what do you feel? Anxiety? You hold back? Fear? You backtrack? You doubt?
What some experts recommend is to deliberate on that risk for a while before leaping off the cliff. If your fear of risk keeps rearing its ugly head too often or it’s eroding your confidence, it’s time to weigh things and put a filter on.
How much of that fear is true? How much do you want to do the thing you want/need to do? How capable are you of shutting down the fear? Can you also tell that fear of risk to ‘STFU and get out of the way’? Or maybe you can shout at it (mentally, of course) to ‘Come at me!’
Risk Filter On, Risk Filter Off
Another method of overcoming fear of risk is to use positive reasons to overwhelm the negative ones. All those positive reasons you’ve come up with will fuel you enough to put you into gear. It will move you towards your desired outcome one step at a time. It will remind you, time and time again, why this WILL work.
As with everything in life, in everything that you do, every decision you make, comes at a cost. If things don’t turn out the way you thought it was going to, what are the costs? Can you handle them? What’s Plan B?
The worst thing about fear of risk is that it stops you in your tracks and convince you that you’re making a dumb mistake.
What I do is to test the waters, ask, experiment, and measure them against my values, thoughts, emotions, and judgment.
If it still feels right, I take one step forward. And then another. All of this in the direction where fear told me not to go. Curiosity is also a big motivator in life. If you’re curious enough about something, you tend to have a very child-like but mature enough temperament to test the waters out.
Calculated Risk is an Experiment
Think of it as an experiment in a lab. What do you think mixing the blue and yellow mixture will do? Have you learned up enough about the said liquids to know what they are? What did other previous experiments tell you? Are they life-threatening? If they are, have you taken the necessary measures to contain negative outcomes?
And like scientists, if the experiment turned out well, note it down! Please write it down somewhere because the positive outcome is going to add to your positive filter later on when fear comes up again to tell you you’re wrong.
One step after another, you’ll find yourself opening up new pathways and there will be more risks involved. Then it is time to reflect on what you’ve done so far and look at all the things that worked.
Most of us think of fear as a negating factor, always working against us. This cannot be further from the truth. Fear of risks is trying to protect you.
For instance, if your friend’s come up to you with a ‘brilliant’ business plan and you’re wondering if you should take it on, take some time to think about it.
Fear is Your Friend Trying to Protect You
Fear will tell you that you will fail, lose money and friends. Your positive side will tell you you’re going to make it and mark it as a milestone. Sometimes, you’ll wonder why bother because playing it safe is so much safer and better! #lol
Nobody in this world, not even all the mentors in the world – be it Oprah Winfrey, Gary Vaynerchuk, or Tony Robbins – know the exact outcome of their actions. They fail too. But it’s because they failed that they succeed.
I’ve read somewhere that risks should be taken in small doses so that you can handle and learn from them. Start building it like a Lego set – one block at a time.
In investment, every investor has a risk profile. The higher the risk they’re willing to take, the bigger the expected return. The reality is that there is a relationship between risk and return.
“…anyone can really take on an entrepreneurial attitude. An entrepreneur does not necessarily create a business. It’s just a very bold attitude of taking on risk.”– Jack Dorsey, Twitter
Risk is an unavoidable fact of life. So, instead of risking everything or putting all your eggs in one basket, measure the kinds of risks that you desire enough to venture on and sift out those that are merely impulsive.
Are Your Dreams Bigger than Your Fears
Focus on taking the right kind of risks that will get you where you want to go. Take on the right kind of risk will bring you the right kind of opportunities. Will the outcome of the risk, if positive, enhance the quality of my life? Will it make me happier and prouder? Is it going to bring me closer to my dreams?
If your dreams or desire to win the game is big enough, you’ll find the courage reserve within you to counter a wall of negativity. You’ll climb it or break it down. That’s what happens when you commit to something – be it writing that novel or running that marathon.
Commitment takes courage and when you feel doubt, punch it in the gut. No, just take a breather and tell it to calm the eff down. There’s a ‘yes’ answer to every ‘no’.
This week, I had the privilege of speaking to one of the most inspirational people I’ve met, a 30-odd something man in Singapore with cerebral palsy who is a sailing coach for both disabled and able-bodied athletes.
We can bet our bottom dollars that the number of ‘no’s this man has faced throughout his life outnumber ours.
The biggest factors that help us move forward when we’re afraid are:
- Positive filters
Of course, knowing that in order to get from one point to another in the direction you want is to take risks. Even if it is failed risks. They move you forward towards your goals because they contain the biggest and most invaluable life lessons.
Here’s an article from entrepreneur.com that I want to share with you, How to Take Risks that Win (Almost) Every Time. Yes, the title of the article is a little clickbaity but it has some precious nuggets of information in it.
It’s OK to Fail
Some people may live by the mantra of ‘Failure is NOT an option’. But to me, failure IS an option. It’s OK to fail because it can be seen as a pathway to success.
In a study done by New York University found that those (under the experiment) who were told that they were allowed to lose ended up being OK with losing AND came off doing better than those who were not given the same pep talk.
The answer found during that experiment was that when we’re OK with failure, we’re mentally prepared for it and it flips the switch for ‘Plan B’. It also removed the crippling element of fear.
I also recently led and helped manage a LIVE online event with a team of positive-minded people and the fear was high. We were running on high gear for most parts of the few days because we were unsure about the process and outcome. And yet, our desire to make it happen simply kept us moving forward.
I won’t speak for everyone else but for me, what kept me going was that the fear of risk was smaller than my curiosity and desire to make it happen. I’ve analyzed things from every angle I could and simply listened to my gut. At times, I would envision what success looked like.
We didn’t win any prizes for the event. Instead, it was definitely a win for the team because it was all of us going in pretty much blindfolded, holding each others’ hands. In such situations, when you come out of the dark maze of uncertainty unscathed, that’s an effing win.
Before you go, here’s a little reminder of what went through here. I hope it serves as a reminder to all of us, including me, that it’s OK to fear risks. It’s also perfectly fine to fail. The important thing is to bring along the lessons that comes with failure and learn from it.
- Calculate your risk
- Base your decisions on historical behaviors, facts, and outcomes
- Anticipate the occurrence and know what to do about it
- Noone is COMPLETELY in control of outcomes
- Put a positive filter on
- Experiment and measure risks
- Note down the results of each small ‘experiment’
- Risks open up new pathways
- Fear of risks is trying to protect you
- In order to succeed, you must first fail
- There is a relationship between risk and return
- Focusing on the right risks bring you the right kind of opportunities
- Be mentally prepared for both success and failure
Sending you lots of love and have a great weekend ahead!