Forbes: Take a Risk the Odds are Better than you Think

 

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***THE FOLLOWING ARTICLE COMES FROM FORBES, THE ORIGINAL SITE CAN BE FOUND HERE: http://www.forbes.com/sites/margiewarrell/2013/06/18/take-a-risk-the-odds-are-better-than-you-think/ THIS IS AN EXCELLENT ARTICLE***

Take A Risk: The Odds Are Better Than You Think

By: Margie Warrell

6/18/2013

As you look back on your career and life to date, where do you wished you’d been a little braver, trusted in yourself more, and been less cautious in the chances you took?

Anything come to mind?  When speaking to people in their forties and beyond, many tell me that if they could do their career over again, they’d have taken more risks, settled less and spoken up more often. In short, they wished they’d been more courageous in the risks they’d taken.  Perhaps you relate.

Often we know what it is we want to do, but we still don’t do it. Why? Because, as I wrote in my latest book Stop Playing Safe,  we are innately risk averse and afraid of putting our vulnerability on the line. The status quo, while not particularly fulfilling, can seem like an easier, softer, less scary, option.  Indeed, advances in brain imaging technology can now verify that we human beings are wired to be risk averse. In other words, we find it much easier to settle with the status quo, keep our mouths closed and our heads down rather than make a change, take a chance,  or speak up and engage in what I call a “courageous conversation.”

When weighing up whether to take an action that could leave us vulnerable to failing or some other form or loss (of reputation, money, social standing, pride etc), we have an innate tendency to misjudge four core elements in assessing risk.

1. We over-estimate the probability of something going wrong.  As Daniel Kahneman wrote inThinking,  Fast and Slow, when assessing risk, potential losses tend to loom larger than potential gains. That is, we tend to focus more on what might go wrong – what we might lose or sacrifice – than what might go right. Because what we focus on tends to magnify in our imaginations, it causes us to misjudge (and over-estimate) the likelihood of it occurring. Yet the reality is that the risk of something not working out is often not near as high as we estimate and the odds of it working out well, are often far better.

2. We exaggerate the consequences of what might happen if it does go wrong. This is what I refer to as ‘catastrophizing.’  We come up with  dire and dramatic worst-case scenario images in our minds-eye. Rather than assume that we would act quickly to head off or mitigate a situation if things started going off track, we imagine everything spiralling shockingly out of control while we passively stand by, conjuring up images of ourselves destitute, shunned by our family, ostracized by  our peers and forever shamed by our failure.  Okay, maybe I go too far. Maybe you don’t catastrophize quite so dramatically. But the point is, we are neurologically wired to exaggerate how bad things could be if our plans didn’t work out, and we fail to appreciate our ability to intervene to ward off further impact.

3. We under estimate our ability to handle the consequences of risk.  This goes hand in hand with the above, but is more focused on our capability over all.  And while I hate to say it, women are the biggest culprits when it comes to underestimating their abilities and buying into self-doubt. Too often we let our misgivings about whether we have what it takes to succeed get the better of us. The result is that we often avoid taking on new challenges (or proactively pursuing new opportunities) because we don’t trust sufficiently in our ability to rise to the challenges they involve.

While speaking at a women’s leadership event at Ernst & Young last week, the Sydney office managing partner, Lynn Kraus shared with me how she had declined an offer to take on the senior leadership role several times before finally accepting.  Each time she had turned it down, it was because she didn’t think she had the ability to succeed in the position. Looking back now, with the benefit of having been in the role for several years, Lynn realized that she’d been gravely underestimating herself. Fortunately for her,  those who saw her potential didn’t give up on her easily. Still, how often do we fail to judge our own capacity for risks – like taking on a bigger role or pursuing a lofty goal – accurately?  In my experience, it’s far too often.

4. We discount or deny the cost of inaction, and sticking with the status quo.  I wrote about this in a previous column titled The Parmenides Fallacy: Are You Ignoring the Cost of Inaction?   We tell ourselves “It’s not so bad” and delude ourselves with the hope that our circumstances will somehow just get better over time and things will just ‘sort themselves out.’   We come up with excuses for why sticking with the status quo is a feasible option; why playing safe and not putting ourselves at risk of failing or looking foolish is ‘sensible.”  In reality, things that aren’t working out well for us now only tend to get worse over time, not better, and issues remain unaddressed in our relationships and lives tend to grow larger, not smaller.

These four different human tendencies working together help to explain why so many supposedly smart people find themselves living in such a restricted circle of their potential, feeling dissatisfied in their careers, stuck in their relationships, and living lives they would never have chosen, much less have aspired to.

So how do we overcome our tendency to play safe and identify which risks are worth taking?  Start by asking yourself these three questions:

1. What would I do if I were being more courageous?  
2. How will inaction cost me one year from now if I do nothing?
3. Where is my fear of failure causing me to over-estimate the size of risk, under-estimate myself and holding me back from taking risks that would serve me (my business etc)? 

Whatever answers come into your mind, take notice!  They are pointing you to a brighter future that you can only create when you commit to taking bolder, more decisive and courageous actions.  Will there be risks involved? Of course!  But remember that you are wired to both overestimate the size of them and to underestimate your ability to handle them.  The truth is, as Lao Tsu wrote two thousand years ago, “You are capable of more than you think.”

If you’d like to watch a short video I made about the need to rethink risk, and to step boldly out of our comfort zone toward it, please click here.

Fear regret more than failure – history has shown that we fail far more from timidity than we do from over daring.  Or to quote a little Latin: Fortes fortuna adiuvat.

“Fortune favors the bold.”

 

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