Risk is a part of life. We take risks each and every day. Some risks are calculated, some are deliberate, and some are unintentional. I was watching a documentary on people who love to skydive. They know what they are doing, they love what they are doing, and therefore, the rewards of this activity far outweigh the risks. Sure, accidents happen but these professionals, through their expertise and the deliberate measures they take to minimize risk, see only reward in this activity. Personally, I don’t share their assessment. In part because the thought of falling through the air terrifies me. It terrifies me because I only see risk and I don’t perceive gaining any joy through such a fall. Therefore, I don’t participate in such an activity.

This got me to thinking about other activities in our lives and the associated risks, both perceived and real. What is your risk to reward equation with respect to the following?

  • Parasailing
  • Taking the Elevator 
  • Having a child
  • Skiing
  • Owning a dog
  • Swimming in the ocean
  • Traveling overseas
  • Scuba diving
  • Driving a motorcycle 
  • Getting on a rollercoaster 
  • Getting a flu shot 
  • Rock climbing 
  • Fixing your car yourself
  • Kayaking 
  • Mowing your lawn
  • Playing football
  • Skateboarding 
  • Having sex
  • Going on a cruise
  • Giving birth at home 
  • Shopping online
  • Taking anesthesia 
  • Owning a gun
  • Engaging in social media 

You may have dismissed some things on this list as being things where there is no risk and all reward. Truth is there is some risk in each activity. We can mitigate that risk by knowing what we are doing and taking appropriate action. We can also accept that risk as being “the cost of doing business”: we see so much value in a given activity that we are willing to live with the potential consequences. A responsible individual is one who makes informed decisions about risk. He doesn’t hide from it and he doesn’t blindly assume it: he accepts it. As a leader becomes more senior in an organization, her role becomes more and more about accepting risk; if to accept it, when to accept it, and how much of it to accept. There is a continual tug of war between the risk-averse and the value-oriented individuals on the team. Those who hide from risk slow the pace of progress and minimize the value they bring to the team. Those who are focused on the value proposition make amazing things happen, but often overlook the risk associated with moving so quickly and openly.

With every decision we make there are desired effects and unintended consequences. If you look at the list provided, think about the reason why you would want to engage in an activity. Now, think about the potential unintended consequences of doing the same. What is your personal level of comfort? Will you take part? What can you do to prevent or mitigate the unintended consequences? Is it now a responsible action to take?

I continue to spend my professional career working in a field where risk aversion is the standard. It’s where I find myself spending more time convincing others to accept additional risk and boldly act than I do asking them to slow down and remain cautious. 23 years into it, and I find it as frustrating as I did when I submitted my resignation letter six years into it. I am by no means an adrenaline junky, but I have said yes to all but four things on the list above. The things to which I said no were deliberate and represented risk in which I had zero interest accepting. I have some amazing friends who accept far more risk in certain aspects of their lives than I ever do. They are people who will likely have zero regret when the journey is over. I have some amazingly risk-averse people in my life who hold themselves back on a daily basis. They assume the risk outweighs the reward of nearly every activity. I can’t help but think they are on a life trajectory where regret is the standard.

  • Where do you fall on the risk/reward scale?
  • Are you value-oriented or risk averse?
  • As a leader, how do you go about accepting risk?