You can learn Smart Risk-Taking…

People often say that you can’t achieve success without taking risks, but just how much risk do you really need to take to achieve your personal or professional goals? With the right approach, you can cut down risk significantly without compromising on your goals. Here’s how…

There’s no change without risk. All of us need to change something in our life at some point. It can be a personal change or a professional change. In both cases it means stepping into the unknown is filled with risk. That’s the nature of change and the unknown. Does it mean we should avoid change to avoid taking risks? Well, only if we’re so happy about everything that we don’t have to change a thing. Personally, I’ve never met a person that has nothing to change about his or her life, but if you are such a person, leave a comment or reach out to me, I want to speak with you… For the rest of us, there’s a regular need to face risks to allow change to happen in our lives.

Risk-taking is a skill that entrepreneurs have to master if they want their projects to succeed. The nature itself of entrepreneurship entails risks. When launching a business there are so many unknowns, about your potential customers, about your product, about your team, about your operations, about your financial future that you need to learn to manage it. If you learn to navigate the unknown and minimize your risks along the way, your project then has a fighting chance. That’s very true for entrepreneurs, but everyone really could benefit from mastering that skill, even when working in a large company.

Risk can be frightening because we tend to see it as an all-or-nothing type of choice. Should I stay at my current company or leave, should I start my business or not, should we get married or not. We look at it as if there were no choices in between. Well, this is where the art of risk-taking lies, in between… For every dilemma you’re facing there’s always an infinite number of options to choose from. You might not like them all, but it doesn’t matter because all you need is to find that one option you feel comfortable with. Actually, let me correct that, all you need is to craft one you feel comfortable with… To craft your option means to develop a solution to your dilemma that gets you what you want while reducing as much as possible the risks.

There are 4 things you should consider when deciding to take a risk:

Get your risk/reward equation right

For each risk there’s a reward, but sometimes you can take significant risk to get very little reward. Think about someone driving recklessly, the risk is huge, but what’s the reward? So, you have to make sure there’s a big reward waiting for you and making it worthwhile for you to take that risk in the first place. If the reward is unclear or insufficient, then don’t go for it, or craft a lower risk option for that reward…

Understand your motivations

You need to fully understand why you’re taking a risk. Not understanding sufficiently your motivations can lead you to take risk for a reward you might not actually want in the end. You might want to change careers or companies, but do you actually know why you want to make that change? Is it to leave something you don’t like behind?

There are numerous ways to understand your motivations and a great one is to test things out before making the plunge. If you dream of a different career, find a way to test it out for a few weeks. Do a sort of unpaid internship just to see things from the inside, even if it’s not on the job you are interested in. Want to move from Sales to Software Development? Or the other way around? Spend some time in that department to learn about the day to day,

Launch a pilot

Break your project down into a smaller version of it that holds much less risk and test it out. Learn something from that pilot and expand it step by step until it reaches its ultimate goal. That’s a technique borrowed from the Agile methodology. You start small, go live on a smaller version of your project, get real results, learn from them and expand…

You want to put in place a project that overhauls how your organization works? Maybe test it out on part of your activities, or on a single geography, or a single person to start with…

Secure early buy-in

Speak with the people that matter to the success of your endeavor and get their buy-in before launching. For a new business it could be about finding your first customer before leaving your 9 to 5 job. For a project within your company it could be about getting an executive sponsor. Imagine you want to make significant changes to the support give to the sales department, then start by securing sponsorship from a sales executive whose team will be impacted.

It’s all about taking steps to mitigate some of the risks while not compromising on the desired outcome. It might take more time to get there, but not necessarily so…

Crafting the right solution to achieve your goals that makes you take just the right amount of risk is an art in itself but it’s an art that can be learned and that can be guided. I personally use a document that lists the key questions I should ask myself every time I want to make a change and take some risks. You can check it out here…

As usual, here’s a short video from Deborah Perry Piscione’s course “Risk-Taking for Leaders” about how to cultivate risk-taking in your team, your organization, and your career.

Risk taking is a complex subject because there’s a different answer for every problem and for every person. What’s your view on the best way to take risks? Do you have a way of making the right choices? Looking forward to reading your comments….

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