Calculated Risk

So we all hear a lot about taking risks but don't hear a lot about how to take calculated Risks.

In your opinion, what should we consider while taking a risk in your life or business? 

What are some key measures that one should always keep in mind?

How do you make the right decision when risks and rewards are high?

  • Risk is an inherent part of life, whether it be personal or professional. In our personal lives, we take risks every day - from trying out new food to taking a different route to work. Similarly, in business, risk-taking is often necessary for growth and success.However, not all risks are created equal. Some may bring about positive outcomes, while others could result in negative consequences. As such, it is important to carefully consider the risks we take in both our personal and professional lives. Also, it is also important to note that risk can be subjective - what one person may perceive as risky, another may not. Additionally, individuals and businesses have varying levels of risk tolerance, which can impact their willingness to take on certain risks. Therefore, it is crucial to have a clear understanding of one's own risk tolerance and the potential consequences of taking on a particular risk.

    To ensure that your risk management efforts are successful, there are some key measures that you should always keep in mind. These measures will not only help you identify and mitigate risks but also build a resilient organization that can withstand any potential threats.

    Conduct Regular Risk Assessments

    The first step towards effective risk management is conducting regular risk assessments. This involves identifying potential risks that could affect your business, evaluating their likelihood and impact, and implementing strategies to mitigate or eliminate them. Regular risk assessments will help you stay updated on potential threats and make informed decisions to protect your organization.

    Develop a Risk Management Plan

    A risk management plan is a comprehensive document that outlines the strategies and procedures for identifying, assessing, and managing risks within an organization. It should include clear roles and responsibilities, communication protocols, contingency plans, and regular review processes. Developing a risk management plan will help ensure that all stakeholders are on the same page and prepared to handle any potential risks.

    Implement Risk Mitigation Strategies

    After identifying potential risks, it is important to implement appropriate risk mitigation strategies. These can include measures such as implementing security protocols, regularly backing up data, diversifying suppliers, or purchasing insurance. The specific strategies will vary depending on the nature of your business and potential risks, but the key is to proactively address any vulnerabilities that could negatively impact your organization.

    Foster a Risk-Aware Culture

    Effective risk management requires a shift in mindset from reactive to proactive. This starts with fostering a risk-aware culture within your organization. Encourage employees at all levels to report potential risks and provide them with training on how to identify and manage risks. By involving all stakeholders in the risk management process, you can increase accountability and awareness throughout your organization.

    Regularly Review and Update Your Risk Management Plan

    Risks are constantly evolving, so it is important to regularly review and update your risk management plan. This should be done at least annually, but more often if significant changes occur within your organization or industry. Reviewing and updating your plan will ensure that it remains relevant and effective in mitigating potential risks.

    Monitor and Evaluate Risk Management Efforts

    As with any business process, it is important to monitor and evaluate the effectiveness of your risk management efforts. This can be done through regular reporting, incident tracking, and collecting feedback from stakeholders. By regularly measuring and evaluating your risk management efforts, you can identify areas for improvement and make necessary adjustments to strengthen your overall risk management strategy.

    Be Prepared for Potential Disruptions

    Despite your best efforts, risks may still materialize and disrupt your business operations. It is important to be prepared for these potential disruptions by having a contingency plan in place. This could include backup systems and processes, emergency response plans, and crisis communication strategies. Being prepared can minimize the impact of a risk event and help your business recover more quickly.

    Continuous Improvement is Key

    Risk management is not a one-time task, but rather an ongoing process that requires continuous improvement. Regularly reviewing and updating your risk management plan, monitoring and evaluating your efforts, and being prepared for potential disruptions are all important components of continuous improvement. By regularly assessing and enhancing your risk management strategy, you can better protect your business from potential risks and improve overall organizational resilience.

    Finally, to make informed decisions, it is important to understand the level of risk involved in a particular situation. This can be done by assessing and evaluating the probability of various outcomes and the potential impact they could have.

  • I think it was Mark Zuckerberg that said, The biggest risk is not taking any risk... I'm usually a dive into the deep end because it's the quickest way to learn how to swim type and I haven't drowned, so far.

  • Everyone's risk tolerance is unique to them.  One of the biggest factors would be what kinds of support are available should the endeavor not work out.

  • Ask what is the worst thing that can happen, and ask what is the worst LIKELY thing to happen.  One needs to balance.

  • Great distinction.  I like it.

  • For me it's weighting the pros and cons, including the probability for each outcome scenario.

  • Risk is definitely everywhere everyday in everything you do. Just got to do your best to navigate around it and keep the course in line/intact

  • Reward often outweighs risks worth taking, but it's important also to consider how to live with the worst outcomes, if likely. 

  • I think all risks are calculated risk, it is just the degree of risk tolerance that you have that will determine how much you calculate before you take the plunge. There is something to be said about "nothing ventured, nothing gained" but if you go into any situation with rose colored lenses you are very likely to walk away with broken glasses. Whenever i talk to someone about opening a business I tell them to list all of the reasons why it can work and all of the reasons why it may not work. If you cannot come up with any downside, then you are not seeing things clearly and are headed for disaster. The ability to overcome an obstacle is reliant on your ability to see it coming. Life is filled with hurdles and if you fail to recognize the hurdle you are going to fall flat on your face at the smallest setback.  Take risks, but don't be risky.

  • evaluate the varieties of outcomes, and if you can deal with that then he risk is good