Minimizing risks before taking decision lead to maximum success.Risks play a major role in taking decisions and we should think hard before taking them.Risks are everywhere like in business you have to take a risk of investing huge amount of money,in relationships etc.The key to minimizing risk and maximizing success is not very complicated.Risk management helps you identify pros and cons.Minimizing risks lowers the chance of failure.The level of risk you’ll experience in a given situation is unique to you. While speaking in front of a group is a risk to some people, it’s not risky at all to others. Ask yourself the following questions to help you calculate your risk level:
What are the potential costs?
Sometimes the cost of taking a risk is tangible—like the money you might spend on an investment—but other times, intangible costs are associated with risk, like the risk of being rejected.
What are the potential benefits?
Consider the potential positive outcome of taking the risk. Look at what would happen if the risk turns out well. Do you stand to gain increased finances? Better relationships? Improved health? There needs to be a big enough payoff to outweigh the potential costs.
How will this help me achieve my goal?
It is important to examine your bigger goals and look at how this risk plays into that goal. For example, if you are hoping to gain more money, look at how opening your own business could help you with that goal as you examine your risk.
What are the alternatives?
Sometimes we look at risk as if we only have two choices—take the risk or pass it up. But, often, there are many different types of opportunities that can help you reach your goals. It’s important to recognize those alternatives that may lie in between so you can make the most well-informed decision.
How good would it be if the best-case scenario came true?
Spend some time really thinking about the payoff in a risk and how that payoff could impact your life. Try to develop realistic expectations for how the best-case scenario could benefit you.
What is the worst thing that could happen and how could I reduce the risk it will occur?
It’s also important to really examine the worst-possible scenario and then think about steps you could take to minimize the risk that it would happen. For example, if you are considering investing in a business, how could you increase your chance for success?
How bad would it be if the worst-case scenario did come true?
Just like hospitals, cities, and governments have disaster-preparedness plans, it can be helpful to create your own. Develop a plan for how you could respond if the worst-case scenario did occur.
How much will this decision matter in five years?
To help you keep things in perspective, ask yourself how much this particular risk is likely to impact your future. If it’s a small risk, you probably won’t even remember it a few years from now. If it’s a big risk, it could greatly impact your future.
It can be helpful to write down your answers so you can review them and read them over. Be willing to do more research and gain as much information as possible when you don’t have the facts available to help you calculate a risk properly. When the information is not available, resolve to make the best decision you can with the information you have.
TROUBLESHOOTING AND COMMON TRAPS
Monitor the type of risks you’re taking and how you feel about those risks. Also, take note about which opportunities you are passing up. This can help ensure that you are taking the risks that could benefit you the most, even the kind that cause some anxiety. Remember that calculating risks takes practice, but with practice, you can learn and grow.
- Being aware of emotional reactions to risk taking
- Identifying types of risks that are particularly challenging
- Recognizing irrational thoughts that influence your decision making
- Educating yourself about the facts
- Spending time calculating each risk before making a decision
- Practicing taking risks and monitoring the results so you can learn from each risk you take
WHAT’S NOT HELPFUL
- Basing your decisions about risk on how you feel
- Avoiding the types of risk that stir up the most fear
- Allowing irrational thoughts to influence your willingness to try something new
- Ignoring the facts or not making an effort to learn more when you lack the information you need to make the best choice
- Reacting impulsively without taking time to weigh the risk
- Refusing to take risks that cause you discomfort