During a recent client meeting, I addressed the veritable ‘white elephant in the room’ with this question:
Exactly what risks are associated with this decision?
And the echo of the awkward silence that ensued was deafening…
Many business fail to comprehensively evaluate the risks associated with their decisions.
It’s one thing to acknowledge that your business decisions require a level of risk, but it’s another thing to discuss the risks; to scrutinise and interrogate them. Unforeseen risks can have significant tangible and intangible business costs. After all, if you don’t assess the risks tethered to your decisions, how can you then create strategic risk minimisation plans?
Here are a few simple questions to ask yourself as you approach business decisions:
1. What are the risks associated with this decision?
Anticipate the risks associated with your desired outcomes. Consider them. Risk taking has real costs. Write down the risks and stare them in the face. Decide whether they are worth your investment of time, money, resources, mental real estate and emotion.
2. What would my Antagonists think of this idea?
Antagonists can be unsettling and scary. However, people who oppose your ideas can offer you invaluable business insight.
a. Antagonists can expose risks you may not have considered. Remember, unanticipated risk equals unanticipated costs.
b. Antagonists can strengthen your resilience. Managing risk is usually a process not an event. If you can stand in the firing line and take bullets for your idea, you have early evidence of your ever-increasing resilience.
c. Antagonists help you sift through ideas. It’s a confronting prospect to place your ideas under the scrutiny of others. As far as business ideas go, it is vital that we separate great from good so that we favour the risks associated with the returns offered by great ideas.
3. Am I in a good mental, physical and emotional place right now to assume these risks?
If the answer is anything but YES, don’t rush decision making.
Take it slow and revisit the risks when you can manage them.