Here’s What I’ve Learned About Risk in Life

So much in life can go wrong, and too little can go right. The difference between success and failure can be a matter of getting your business model, dream job, management team, disruptive technology, or scalable approach just right. It can be a “game of inches”.

(Note: Al Pacino speaks about ” the inches we need” in this Any Given Sunday Speech)

But when we believe in something – and if we’ve done the necessary research to make sure we have a reasonable chance at success and if we can afford to lose if we fail – then it might make sense to take the chance. There’s no guarantee for success, but if we let risk hold us back we won’t get out of bed in the morning.

Most of the time it makes sense to move forward. I like using Dr. Ben Carson’s Best/Worst Analysis (B/WA) to size up my own exposure to risk. Consider something that you think you want to do, but have held back on because of uncertainty or risk. With that in mind, now take a moment to answer these four (4) questions:

  • What is the best thing that can happen if I do it?
  • What is the worst thing that can happen if I do it?
  • What is the best thing that can happen if I don’t do it?
  • What is the worst thing that can happen if I don’t do it?

I’ve found that when people answer these questions (honestly), their risk – or level of exposure – is often lower than they had imagined. This approach can help to reframe risk into something we can use and understand. It bookmarks our risk, and helps us to see the worst and best case scenarios. Most of the time it shows us the risk is acceptable.

But sometimes it makes good sense to stop what we’re doing. Consider the startup entrepreneur. What are they willing to invest to make a business work. A year of life? Their sanity? Over $150,000 of life savings? Their marriage? Knowing the acceptable risk and exposure upfront can be very helpful in this case. Otherwise, it’s easy to dig a very large hole they can’t see a way out of.

At some point we need to know when to stop or pivot and move forward in some different direction. There’s nothing wrong with thoughtfully changing direction – or even stopping all together. Sometimes it’s important to exit gracefully and put the negative behind us. In the moment, it’s hard to believe we will heal and that other good opportunities will come our way. We often get trapped trying to hold on because of what we put in, but most of the time it’s really just “sunk cost”.

Most of us have heard Churchill’s statement “Never, never, give up…” and it’s easy to hear that we should continue on and not quit – at any and all cost. But when we read the full quote he gave in his 1941 speech at Harrow School, we find it actually reads as follows: never give in, never give in, never, never, never-in nothing, great or small, large or petty – never give in except to convictions of honour and good sense.

It’s easy to miss the part about “never give in except to convictions of honour and good sense”. But when we read the full quote, the context and meaning change. It moves away from “don’t ever quit because if you do you are a quitter” – and it seems to be implying that we shouldn’t let others pressure us into giving in. We shouldn’t compromise our honor or reason. And when our sense of honor and common sense agree that it’s time to give in, then do it. Because at that time, it will be the right thing for us to do. Listen for yourself…

CHRISTOPHER MENGEL brings over 20 years of insights to business owners and talent leaders inside emerging technology and professional services firms to implement new initiatives, develop new strategies for growth, carry out organizational and cultural change, manage complex projects, and fill business-critical roles. Have a challenge you want to solve? Connect with him on LinkedIn and Twitter and subscribe to his posts or contact him.