Are you a thrill seeker? Or do you like to play it safe? There’s some evidence to suggest that your level of risk tolerance affects your potential for success. My clients who are business leaders, those senior executives in the C-suite, are almost always risk takers. Big risks can reap big rewards – but they can also lead to big-time failure. The key is learning how to dance on that tightrope, while making sure you have some kind of safety net below you.
I don’t know if my high-achieving clients are born risk takers, or if they’ve built their risk tolerance through practice. Studies show that even at a very early age, some children are drawn to new experiences and high-intensity activities, while others prefer predictability, safety, and routine. Both of these personality traits probably have evolutionary advantages. Generally speaking, though, the most successful people are the ones who aren’t afraid to fail.
Sometimes risky behavior only looks that way from the outside. Business leaders often have a set of criteria they use to inform their decision making, so while their choices may look daring, the process mitigates the risk. Or they may just have an instinctive feel for the ins and outs of their business. Again, while their behavior may look risky to us, the executive “just knows.”
One thing’s for sure: the better informed you are about your situation, the safer it is to take a chance. The worst sort of risk-taking occurs when you don’t know enough about the circumstances to recognize the likelihood of an undesirable outcome.
Where are you on the risk spectrum? Consider whether your level of risk tolerance might be affecting your business. If you’re too risk-averse, you may not be investing in new products, hiring new people, or expanding into new markets, so your business isn’t growing. If you’re too much of a risk-taker, you may be entering new markets without research, hiring salespeople without assessing them or the market properly, or spreading your resources too thinly.
I tend to be on the risk-averse side: I feel better when my ducks are in a row. At the same time, I can see how I might benefit by taking more risks. If you’re like me, here are steps that may help you become more of a risk-taker:
1) Declare a risk you want to take. Be specific. For example, you may wish to speak in front of groups more often. Express your plan to a supporter.
2) Keep in mind that the more preparation and research you do, the more your probability of failure diminishes. If speaking in front of a group terrifies you, rehearse your speech until you know it cold.
3) Try the action on a small scale until you reach an increased comfort level. Try giving your speech in front of your dog, your children, or a small group of friends.
4) Share your results and plan your next step with your supporter.
5) Keep expanding the scale. Speak in front of 50 people, then 100, then 1,000.
Repeat steps #4 and 5.
Andrea Novakowski is an executive coach who has been helping clients align their professional goals with their personal values since 1997. By tapping into Coach Andrea's knowledge, tools and skills, clients are able to meld career development and personal growth to reach higher productivity and deeper levels of job and personal satisfaction. Learn more at www.coachandrea.com.