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UNDERSTANDING RISK TAKING

UNDERSTANDING RISK TAKING

The unknowable future is the playing field for risk. Decisions press in on us daily. Should you hire Jill over Jack? Enroll in a graduate program? Ask for a raise? Some decisions are irreversible. Should you change jobs? Have a face-lift? Remodel your home?

Risk taking is a process by which you decide whether to take the chance of losing something that you value to gain something that you desire. Often, these decisions must be acceptable to other stakeholders—individuals or groups with a stake in the outcome. For organizations, these include: customers, employees, work teams, shareholders, suppliers, and community officials.

Risk is inescapable. It’s everywhere—driving in traffic, breathing city air, expressing your views. One must make decisions about career choices, whether or not to marry, where to live. Attempting to avoid one kind of risk may back us into another. Cutting back on nuclear power reduces the risk of radioactive accidents, but burning more fossil fuel increases acid rain and global warming.

People who risk recklessly seek excitement to fill voids elsewhere in their lives. Those who cling to what they perceive as security may miss opportunities and fall into well-worn ruts. While “reasonable” risk cannot be objectively measured, moving beyond one’s comfort zone is the foundation for creative expression, leadership, corporate success, and social progress.

The focus for managers and work teams is not on whether to risk—even inaction is risky—but how to take appropriate risks effectively.

Appropriate risk taking adds zest to your life, challenge to your work, and opportunity to your career. The risk of allowing yourself to be vulnerable with others makes intimacy, caring, and love possible.

How you handle risk affects your career and professional and personal growth. How we collectively handle risk affects organizational success and societal well-being.

To improve the odds of realizing hoped-for gains:

  • Understand your own habitual tendencies when dealing with risk

  • Develop alternative paths and contingent possibilities

  • Reduce exposure to loss or harm

  • Reduce uncertainty

Risk taking is a means of coping with circumstances beyond our control. Virtually nothing happens until someone takes a risk.

The pages that follow offer a comprehensive process for dealing with the unknown in ways that support constructive change.

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