It is imperative that business owners take risks. That is how owners reach their goals, grow companies and make money. But, not all risks are good risks. They are more likely to succeed if planned and deliberate, rather than unplanned and chaotic. We all know someone – including ourselves – who took a badly thought out risk and had it go horribly wrong. Poor decision making and failure is a universal human experience.
So, what can we do to make risk somewhat less risky?
While we cannot completely eliminate failure – nor do we want to, that is how we learn to improve – we can take steps to make it less destructive. The place to start is to commit to being honest with yourself. Honesty about your strengths and weaknesses will go a long way toward reducing bad choices.
No one is good at everything. In fact, people are really good at a very small number of things, and you are no exception. The number 1 reason businesses fail – the owner overestimated his ability to run it and made poor, uneducated decisions.
Don’t want to be that guy? Ask yourself and others the following 2 sets of questions. If you approach this exercise with an open mind and a willingness to learn, the answers will help you achieve future success based on educated decisions.
- What do others think you are really good at? What do they think you are not good at? What skills do you have which create positive change? What abilities or knowledge do you lack which create problems? What do others consistently praise you for? What are the most regular complaints about you? Do you accept feedback and help or do you blow it off?
- Once you have the answers tie them to a past situation where you took a risk and it did not pay off. Use your new knowledge and answer these 4 questions. Remember – honest answers will make the next chances you take more likely to work out.
- What 3 weaknesses or negatives did I bring to the situation? What must I do to make sure they do not happen again?
- What 3 positives did I bring to the situation? What existing strengths, knowledge, and skills do I need to build on to ensure success next time?
- What are the 5 reasons others think the risk failed?
- What 5 things did I learn about myself, as a leader and manager, from the circumstances?
If you have no answers for these questions, or if they are self-serving, go back and answer the first set of questions again.
Do not be too afraid, clueless, egotistical or complacent to seek out reality checks. Taking risks makes life interesting and is vital to success, but they must be realistic. Exceptional people do whatever is needed to stack the deck in their favor, average people do not.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information: