Evaluating the Risk Factor
A significant part of life consists of evaluating risks, taking risks, learning from the risks you have taken and controlling the risk factor to the best of your ability. This is true in many areas of our life including our personal development, our education, our relationships, our career, and in fulfilling our life calling. William Faulkner said, “You cannot swim for new horizons until you have courage to lose sight of the shore.” Or, as Frederick Wilcox stated, “Progress always involves risks. You can’t steal second base and keep your foot on first.” We must realize that nothing significant is achieved in life without encountering some degree of risk.
We enjoy many things in life because of the risks taken by others. For example, we enjoy living in this great nation of the United States of America, largely because of the facts stated by Brooks Atkinson “This nation was built by men who took risks — pioneers who were not afraid of the wilderness, business men who were not afraid of failure, scientists who were not afraid of the truth, thinkers who were not afraid of progress, dreamers who were not afraid of action.” Our success is usually due in part to the people who have risked the status quo and bravely ventured into the unknown in order to discover their truly great purpose in life (and we often end up riding on their shoulders to accomplish our achievements in life).
However, taking risks without counting the cost, or evaluating the danger involved can be very foolish. Risks are necessary, but they are not to be done without caution or wisdom. Taking risks does not mean we blindly leap from the cliff, and hope there is a safety net somewhere. We must value what former US General George Patton observed, “Take calculated risks. That is quite different from being rash.”
Recently, I had an opportunity to review and evaluate the results of a project in which I had been in charge. We were very successful in some areas, and not-so-successful in some other areas. There were a number of things that contributed to the not-so-successful areas; one of them being the improper evaluation of risk that was involved.
This in turn led me to formulate some questions to help determine whether or not we had properly evaluated the risk factor in some of the things that we attempted to do. A large portion of being successful in life is learning to ask the right questions. Thomas J. Watson, who was the founder of IBM, stated from his experience that “The ability to ask the right question is more than half the battle of finding the answer.” Here are five questions I asked myself as I prepared myself to evaluate the risk factors:
- Have I asked the right questions to get the correct information?
- Am I prepared to listen to the advice that is given?
- Have I identified my true motive for wanting to do this?
- Am I asking the right people for the information I need?
- Who can I ask to help me assess the risk correctly?
- Am I within my area of authority and responsibility to get this done?
Next, I realized we must learn to ask the right questions in order to properly evaluate the risk that is involved. So I asked myself the following seven questions to help me properly evaluate the risk factors:
- Can I control the factors in this situation, or are there too many factors beyond my control?
- Can we do something just as good with less risk involved?
- What is the fallout for us and the company if the risks are too great and what we attempt to do ends up failing?
- How much does this item actually contribute to the outcome of the overall success of the project?
- What resources can we use to make sure we are taking the least amount of risk?
- Which person is the best suited to make sure that the job gets done with the least amount of risk?
- What back up plan do we have in the event that what we are trying to do fails?
No matter how good we are, or how hard we work, or how awesome our team is, we will not be successful a hundred percent of the time. It is unrealistic to think that we can arrive at the place where we never fail and that everything we do will be successful. Part of learning from life’s experiences is to sift through the ashes of failure to find the lessons that help us to grow and be more successful in the future. We must learn the truism stated by Billie Armstrong that “Anything that is successful is a series of mistakes.” Every person who relates the stories of his or her success could also tell numerous stories of how they had failed.
Most people are afraid of failure or embarrassment and therefore do not take the risks that would bring them the success they need. One anonymous person once observed that “Many great ideas have been lost because the people who had them could not stand being laughed at.” And yet, it is often the person who is willing to become the laughing stock of the general populace that makes a significant contribution to the well-being of others in life. History often looks kindly upon those who, in their time, were willing to take the unpopular risks they thought necessary in order to achieve the progress needed by mankind. George Washington, Abraham Lincoln, Martin Luther King Jr, and many others bravely risked their reputation and their lives for the ideals they believed would help mankind.
We must learn not to base our risk on popularity, but upon progress. In the end, it is like Mark Twain said, “Twenty years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines, sail away from the safe harbor, catch the trade winds in your sails. Explore. Dream. Discover.”