How to Maximize Your Talent for Risk-Taking
From "Born to Build: How to Build a Thriving Start-Up, A Winning Team, New Customers and Your Best Life Imaginable" by Sangeeta Badal and Jim Clifton
- Know what you do know and what you do not know. Understand the limits of your knowledge. Recognize the preferences and biases inherent in your worldview that can affect your judgment about the results you expect. Resist predicting outcomes based on limited evidence. Gather all relevant information before you take action.
- Take risks incrementally. When exploring a new venture, a new market or a new product, minimize risks by making a small initial investment and evaluating the idea at successive stages in the development process. Consider it an experiment. Build a prototype, test the market and collect information. Then decide if the idea is worth investing in further.
- Beware of confirmation bias. Your extremely positive self-image may lead you to favour information that confirms your beliefs and opinions, while discounting information that contradicts your viewpoint. Do not let this bias influence your decision making. Ask people with opposing views to counter your initial idea or concept.
- Construct different scenarios to guide your decision-making process. Envision how things will unfold in the future, analyze the different directions a project can take and estimate the outcomes in all directions. When you bring potential risk factors to light, you can choose the least risky path.
- Don’t gamble. Take careful, calculated risks. Before an exciting idea sweeps you away in anticipation of what you will accomplish, impose a cooling-off period of a few weeks before you commit any funds. This will give you time to calculate the odds of success and put a plan in place to mitigate the risks.
- Kill unimportant projects. You might overestimate
your ability to succeed at multiple projects simultaneously.
With your team, analyze all the projects in your organization.
Keep your focus on the ones that strengthen
and build your core mission and purpose. Ditch the rest.
- How to Become a 'Builder': Q&A with Sangeeta Badel, Principal Scientist, Gallup by Karen Christensen, available in the Winter 2019 issue.
This article appeared in the Winter 2019 issue. Published by the University of Toronto’s Rotman School of Management, Rotman Management explores themes of interest to leaders, innovators and entrepreneurs.
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