Learn how to assess risk to better predict your success

A lot of the time, we think about risk in the context of finances and physical safety. It’s an easy concept to grasp when thinking in those terms, we can calculate it realistically. However, when we talk about taking chances in order to further our success, we only tend to talk about it in vague terms. “Take a leap in the dark, or you won’t move forward”, or some variation thereof. It can be terrifying to think in this way. So, what does risk mean in terms of your success journey, and how can we calculate it?

Getting Started

Let’s use a Matrix to make this a little easier. The matrix is divided into two categories:

Severity: how severe are the consequences should things go wrong?

Probability: what is the likelihood that things will go wrong? 

Rate your risk in both of these sections out of 5. The number you pick for each category does not have to be the same. 

Rating Your Risk

 Risk assessment matrix
Risk assessment matrix

Results

1. Minimal (Green)

Minimal risks have a low probability and severity. These are the instances where you have nothing to lose if you act on them. Don’t only go for 1s, but keep in mind that the success journey is a marathon, not a sprint. Small consistent steps will lead you towards a better result. 

2. Moderate (Yellow)

Moderate risks have a medium probability and severity. These are the “big” ventures. The ones where things could not go your way at all, but you can still recover from it. There are times when taking these kinds of chances is necessary, but don’t only go for these kinds of opportunities. You don’t want to find yourself gambling with your future because you’re always expecting the big things to work out. Sprinkle in some minimal chances for better balance.

3. Major (Red)

Major risks have high probability and severity. This means that the likelihood of things going wrong is significantly higher than the likelihood of things going right. Maybe don’t approach this venture just yet, wait until when the time is right, a time in which these ventures will be less uncertain.

What is a risk that you have been hesitant to take because you weren’t sure if it was worth it?

“Risks can lead to great victories or defeats. Even if you are defeated, the lesson will be valuable for the next stage of life.”

― Lailah GiftyAkita.

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