Taking calculated risks is about assessing potential gains versus potential losses, and making wise decisions accordingly.”
When you get an out-of-the-box idea or an opportunity arises that would be a departure from your normal way of doing things, your immediate reaction might be to play it safe—to shy away from the idea, or to hesitate to capitalize on the opportunity because it’s new and untried and seems risky. But if you wait too long to decide what to do, the opportunity may pass you by. At times like that, you need to calculate the risk.
It’s not merely a matter of being willing to take risks, because that can also lead to recklessness. Taking calculated risks is about assessing potential gains versus potential losses, and making wise decisions accordingly. You do sometimes need to risk failure for the sake of the potential rewards, but generally there should be a greater probability for a positive outcome than a negative one. The keys are first to understand the odds, and second to do whatever you can to improve them.
Military strategy makes a good analogy. Defensive strategy tends to play it safe. But caution and self-preservation can’t be an army’s only considerations. If they were, that army would never manage to gain new territory. Successful strategies include taking risks, departing from the norm, doing the unexpected, and seizing the moment.
It’s difficult to decide to do something that involves a high degree of risk, even when there is potential for great reward, but life is full of such situations. Here are a few points to keep in mind the next time one comes your way:
Assess the time factor. Few windows of opportunity stay open permanently. Sometimes the choice to pursue or not to pursue a certain opportunity must be made rather quickly, but don’t allow yourself to be pressured into a hasty, ill-advised decision.
Study the situation. Thoroughly and objectively consider the pros and cons, and calculate the odds for success as best you can. Then try to determine what you can do to improve those odds.
Learn from others. Try to find accounts of others who have taken similar risks, and examine why they succeeded or failed.
Don’t abandon common sense—risk-taking is not about abandoning common sense. Be willing to take action. You can’t afford to be impulsive, but you also can’t wait for everything to be perfect and risk-free; you need to be prepared to commit when the time is right, to seize the day.
If a seemingly golden opportunity should come your way and all the essential puzzle pieces are in place, it could very well be your time to take the risk. Such calculated risks can become the gateway to your success.
—By Pete Fontaine