Taking calculated risks. What does it really mean?

Updated: Jun 7, 2020

I’m a bit obsessed with how to make better decisions and I guess you’ll see that theme pop up again and again in this blog. From navigating a dilemma to leveraging intuition, I try to be conscious about what tools I’ve used when I’ve gotten the best results from a decision.

Enter “calculated risk”. Dictionary.com defines this as “a chance of failure, the probability of which is estimated before some action is undertaken”.

Taking calculated risks isn’t quite about weighing options, it's about "weighting" risk. It means giving a value to each risk and deciding if you’re willing to handle it if it materialises.

So of course, asking great questions is the bedrock of this process. Questions like:

  1. “What is likely to go wrong if I do this and what is the extent to which it can go wrong?” i.e.

  2. “What is the absolute worst that can happen?”

  3. “If the worse does in fact happen, what can I do? What will I do?”

  4. “What else haven’t I considered here?”

  5. “Who else will be affected, how and to what extent?

If they’re people who stand to be negatively affected it may be a good idea to run your intended action by them before you hit the “go” button. But in the end, as a teacher of mine used to say, “If you can deal with the worst-case scenario, go ahead and do the deed.”

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