As an entrepreneur you will have to manage risk. Whether it’s sacrificing a steady pay-check to start out on your own, trusting your employees or taking a brand new product to market.
Risk assessment is a crucial part of business strategy and decision-making says, Srini Pillay MD. In an article for the Harvard Business Review, A Better Way to Think About Risk, he says there is a need to shift the way we think of risk, and to start seeing risk assessment as an invaluable skill in today’s rapidly changing world.
Pillay is the CEO of NeuroBusiness Group, a behavioural science institute, and an award-winning author of numerous books on neuroscience.
Here are his 2 recommendations to start seeing risk differently:
1. ‘Start to think of risk-taking as a good thing ‘
Risk-taking is associated with many negative things, like recklessness, irresponsible behaviour and failure. But in the entrepreneurial landscape, it is necessary, says Pillay.
“Many people who have failed due to taking risks have
“Make a conscious effort to remember that risk-taking may be adaptive and may even lead to positive outcomes. In adolescence, for example, it may confer certain advantages because this is when we learn how to adapt to a rapidly changing world” he says.
2. ‘Learn to become an expert at bouncing back from failure’
Failure is an important component of success, says Pillay. It’s not whether or not a person experiences failure that determines their chances of success, but rather, their resilience and openness.
“Many people who have failed due to taking risks have subsequently succeeded. The brain is rigged for error-based learning, so why shouldn’t we become better at experimenting rather than trying to avoid failure through risk assessment?”