In my last post I talked about the importance of risk-taking to career and organizational success. This post extends that idea by offering five specific criteria for evaluating whether a risk is right or wrong for you.
When considering a risky move, most people resort to simple math, asking “What will I get and what do I stand to lose?” But big moves need to consider more than just gains or loses. It takes more than simple math to judge whether to take a risk. As explained in the last post, a Right Risk is one that is congruent with your deepest held values. It’s a risk that should help close the gap between who you are and who you aim to be. What matters most isn’t how much you stand to gain from the risk. What matters most is the risk true for you. Risk should be about more than compensation. It should be about destination. Not, “What will this risk get me,” but “where will this risk take me.”
Here are five criteria that you can use that will help you assess your risk at a much deeper level than just jotting down a pros and cons list. Using the “5 P’s” won’t guarantee that your risk won’t be a wipeout, but they will increase the probability of success.
Passion: A Right Risk is something we care about intensely. Right risks are often ordeals, and ordeals involve suffering. The word “passion” comes from the Latin verb pati, literally translated as “to suffer.” By arousing the strongest, most untamed parts of our nature, and stirring up the wild mustangs in our soul, our passion gives us the raw energy and wherewithal to suffer through the anguishing moments that often accompany right risk. Ask, “What about this risk energizes me?”
Purpose: A Right Risk is taken out of a deep sense of purpose. Purpose serves to harness our passions and give them direction. Right Risks are rich with meaning. They stand for something beyond sensory or ego gratification. Ask, “How will this risk make me a more complete person? How will this risk further my life’s purpose? How will it help me get to where I want to go?”
Principle: Right Risks are governed by a set of values that are both essential and virtuous. As mentioned, risks are essentially decisions, and when facing a decision of consequences, principles form a set of criteria against which the risk can be judged. The principles that right-risk takers often use as the basis of their decision-making include truth, justice, independence, freedom, mercy, compassion and responsibility. Ask, “By taking this risk, which of my deepest held values or ideals will I be upholding?”
Preogative: Right-risk taking involves the exercise of choice. Right-risk takers view the power to choose as a privilege, and then honor it as such. By consistently making choices at a conscious level, they are better able to make superior judgment calls at an instinctual level — in fast-moving situations. After all of the input of naysayers and yea-sayers are considered, the Right-risk taker makes the final judgment as to whether the risk is right for him or her. Ultimately, a Right Risk is an exercise of free will. Ask, “Am I taking this risk because I have to, or because I choose to?”
Profit: A Right Risk should come with a real potential for gain. Risks are, well, risky. And in exchange for assuming the potential risk of hardship, you are entitled to some real and unequivocal upside gains. Notice, however, that Profit is the fifth “P”. It’s the criteria that should be assessed last, otherwise you’ll be in danger of getting to enamored with the pot at the end of the rainbow, which can distort your decision-making. Ask, “What gains do I hope to reap from this risk?” and “How enduring are the gains likely to be?”