To some people, risk is a way of life. To others, it’s a four-letter word, something to be avoided at all costs.
Many people have difficulty embracing risk because they’re afraid of failing: It might be embarrassing, it’s too expensive, it’s too…something else. But not taking risks often means saying no to new successful, rewarding paths. So the next time you’re inclined to label something “too risky,” keep these tips in mind:
You may not think about it, but you’ve already taken risks today, says Don Maruska, a California-based executive coach. From the route you took to work to what you ate for lunch, you regularly take risks.
The difference between everyday risk and business risk, Maruska says, is in the latter, uncertainties loom larger, or the person lacks experience to calibrate and navigate the risks.
“While changing may feel risky, not changing is risky, too,” says Lisa Colton, chief learning officer for See3 Communications, a digital agency for nonprofit organizations.
She suggests starting small and working in iterations to make risk more palatable. In the past, she notes, businesses had to invest large amounts of time and money into research and development, and failure was costly. “Today, businesses can take small risks: evolving a product or beta-testing with different groups,” she says.
Frank Niles, an Arkansas-based executive coach, encourages his clients to practice “stretch and stability.” As he explains it, “The goal must stretch you beyond what you think you can do, but it must also come from a place of stability: a place where you have some experience and competence.”
For example, one of his clients, a corporate manager, wanted to start a consulting business, but wasn’t ready to go out on his own. Instead, he became an internal consultant to his employer, allowing him to pursue consulting while still having the security of a regular paycheck.
Erik Dochtermann, cofounder and CEO of ModCo Group, a New York-based branding and media company with a client roster that includes Carolina Herrera and Vera Wang, has started, sold, or closed nine other companies, and says he’s lost money only once. “Making peace with the fact that the money is committed lets you focus on long-term growth, not incremental returns,” he notes.
Failure to take risks in life and work leads to stagnation and inhibited growth, says
Marie Peeler, a Boston-based executive coach. To overcome your aversion to risk, she suggests imagining the worst-case scenario.
“I’ll ask coaching clients who are struggling with having important conversations with bosses or peers, ‘What’s the worst that could happen if you have the conversation? Will the other person hit you? Will you get fired?’ Usually, [the] client is horrified at my suggestions and quick to point out that neither of those things is likely to happen,” she says.
Next, Peeler has the client make a list of potential benefits, and rate the possibilities. Finally, Peeler asks the client to rate the negative consequences of not taking any action. “Rating the potential downsides of doing nothing and the potential upsides of taking decisive action are often quite compelling,” she notes.