4 Essential Questions about Risk

It makes or breaks you–at least sometimes. Some people manage it foolishly, and it ruins them. Some manage it cautiously, and live safely in the status quo. But a select few seem to know when to hold, when to fold, and when to go all in. And everything they touch seems to turn to gold.

Dice

I’m definitely not one of the latter. But I have been pondering their secrets. I’ve come up with four questions to help me evaluate risk:

  1. What will I gain if I succeed? We often think we know this, but then struggle to put it into words. Do you have a specific and clear picture of what you are trying to attain?
  2. What will it cost if I fail? This is the ultimate paralysis of risk.
    This is the question that keeps us awake at night. We ponder it, fear it, and get stuck in front of it like deer in the headlights of a triple-trailer semi truck. What if I fail? What if everything goes wrong? What if the whole thing falls apart like a manufactured home in the path of a tornado? What if . . . ? Have you ever noticed that we tend to ask the question, but rarely answer it? Often, the cost of failure isn’t all that high. But since we never stop and actually imagine the worst case scenario in detailed, rational, terms, we end up paralyzed by irrational fear.
  3. What are the odds that I will fail? It might have terrible consequences, but a very small chance of happening. Or, it might be relatively mild if everything goes wrong, but a pretty good chance it will happen. The odds of getting caught riding the subway without a ticket are pretty low, but the cost is high enough that most choose not to risk it. On the other hand, the rewards of becoming a professional athlete are profound, but the odds of failure are remarkably high.
  4. What will it cost if I don’t act? This is the oft-forgotten question. All too often, the cost of staying put is far greater than the cost of potential failure. But the potential of future failure is so paralyzing that, like the frog who fails to leap from the soon-to-be boiling water, we choose not to move, and end up costing ourselves far more than if we had acted.

How does this work in real life? We choose to drive cars, even though the cost of failure (#2) can be deadly, and the odds of failure (#3) are somewhat high, because the cost of not driving (#4) is too profound. On the flip side, we often don’t share our most important news (be it gospel, joy, hurt, etc) because the perceived failure is too high (#2), not realizing that the cost of not acting has a greater long-term loss (#4).

We face decisions about risk everyday: Should I apply for that job? Can I really pass that class? Should we pursue that new business strategy? Not every risk is meant to be taken, and not every chance is a golden opportunity. But some are.

What questions do you use to analyze risk? What risks are your wrestling with right now?  Leave a comment by clicking here: comments

  • Proverbs 11:14

    Where no counsel is, the people fall: but in the multitude
    of counsellors there is safety.

    Proverbs 15:22

    Without counsel purposes are
    disappointed: but in the multitude of counsellors they are established.

    Proverbs 19:20

    Hear counsel, and receive instruction, that thou mayest be
    wise in thy latter end.

    Ephesians 4:11-15

    Young’s Literal Translation (YLT)

    11 and
    He gave some [as] apostles, and some [as] prophets, and some [as] proclaimers
    of good news, and some [as] shepherds and teachers,

    12 unto
    the perfecting of the saints, for a work of ministration, for a building up of
    the body of the Christ,

    13 till
    we may all come to the unity of the faith and of the recognition of the Son of
    God, to a perfect man, to a measure of stature of the fulness of the Christ,

    14 that
    we may no more be babes, tossed and borne about by every wind of the teaching,
    in the sleight of men, in craftiness, unto the artifice of leading astray,

    15 and,
    being true in love, we may increase to Him [in] all things, who is the head —
    the Christ;

    1 Corinthians 14:29-33

    Young’s Literal Translation (YLT)

    29 And prophets — let two or three speak, and let the others discern,

    30 and if to another sitting [anything] may be revealed, let the
    first be silent;

    31 for ye are able, one by one, all to prophesy, that all may learn,
    and all may be exhorted,

    32 and the spiritual gift of prophets to prophets are subject,

    33 for God is not [a God] of tumult, but of peace, as in all the
    assemblies of the saints.

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