July 15, 2018
Risk Assessment
Whether it’s jumping on a trampoline or boiling water or driving a car, you take risks all the time.
But you probably don’t spend much time consciously thinking about risk. My guess is that most people don’t. It would be hard to make it through a typical day if we had to weigh the risk of our every action.
It’s usually fine to get by on gut instinct and common sense and cultural norms about what’s considered “safe” for our peer group.
But sometimes we are betrayed by our gut instincts about what’s safe and what isn’t. It seems to me that this is especially true when we are doing something unusual or creative or contrarian.
In cases like this - where there is no conventional wisdom (or there is but we disagree with it) - it helps to have a framework to assess risk.
So here’s a crash course in risk assessment...
Risk has three elements:
- The risk—a negative event that might occur.
- The likelihood—the probability that the negative event might occur.
- The impact—the severity of the consequences that would result from the negative event occurring.
When considering taking some action that feels risky to you (e.g., writing a book, launching a podcast, investing in your business), ask yourself:
- What negative events might this trigger?
- What is the likelihood of each event occurring?
- What would the impact of each event be?
When assessing risk in this manner, you might find that your fears are irrational. Either there is a very short list of risks, or the likelihood of the risks occurring is very low, or the impact of the risks is very low.
Have you been thinking about making a change but have been putting it off?
Try doing a risk assessment.
You might find that doing nothing is actually the riskiest choice.
Yours,
—J