Photo by Riccardo Annandale
For some reason, we have become completely adverse…actually deathly afraid…of anything that we perceive as being a Risk. In fact, we are so adverse to Risk that we really don’t know the difference between risk and uncertainty in building wealth.
Now in fairness, we have to blame a lot of this, if not most of this, to how we as humans are hard-wired. In order for us to have survived and reproduced, we had to have a strong sense of fear back when the Sabre Tooth Tiger roamed our world. The problem is although that hard-wired fear kept us from being eaten thousands of years ago, it doesn’t serve the same purpose for us now.
In fact, I believe it has now become a significant deterrent for many of us from reaching our desires and potential by holding us back from taking the actions that we need to take in order to reach our goals.
Perceived danger…Is there really that much danger?
At this point in our evolution, we are now in a constant state of making a judgement as to whether or not we are in what our brain would interpret as perceived danger.
The problem is that this ‘hard wiring’ tends to err on the more conservative side and when push comes to shove, will usually identify something questionable as a threat or risk.
The problem with this is that in order for us to move outside of our comfort zone so that we can grow we are going to have to face what our brain perceives as risk and still move towards it. The hard part is that this goes against our internal chemistry.
One of the biggest problems for us to overcome this chemistry in our brains and how we’re hardwired is that our brain makes Risk an ‘all or nothing proposition’. If our brain perceives that there is any Risk it tends to want to sound the full danger alarm so that we’ll pull back. However, if the danger doesn’t reach that level our brain tends to give the full speed ahead order.
The problem is that our brain tends to sound the danger alarm when there’s any doubt of what we might be facing. This is the reason that we tend to play it safe a lot more often than taking chances, even if it may turn out that the consequences of these chances might not have been so significant.
Risk is actually a GOOD thing!
Interestingly enough, I have spent a fair amount of time with first-time entrepreneurs and I have learned a lot as it relates to Risk by helping them work through their processes on the way to developing their ventures. In fact, I have learned that Risk is NOT even an all or nothing proposition.
In fact, Risk is actually a GOOD thing! Now how can this be? Isn’t it Risk that triggers the danger alarm inside of our brain? Well truthfully, it’s how we interpret Risk in our brain that creates the triggers for the danger alarm.
More specifically, if our brain was to be programmed to look at Risk differently than how it is instinctively wired and that then becomes the new trigger level, we now have moved closer to considering less things risky than we do now.
Taken even further, if we can start to identify what this Risk actually is…what are the consequences, how severe are these consequences, what’s the probability of these consequences happening, etc…we might even start to determine that Risk really isn’t the unknown like we originally thought it was. It’s actually something calculable, it’s something that has an identified probability.
The real danger is in the Uncertainty
Now then what is Uncertainty? Ahhh…Uncertainty is what we all think Risk is when we first think of Risk. Uncertainty is something that by its nature has no known probability, it has no calculable outcomes. It is the pure unknown.
With Uncertainty now identified as being the unknown, the un-calculable, it has taken the place for what we always have thought Risk actually was. So now Risk is NOT Uncertainty anymore. Uncertainty is Uncertainty! You’re probably saying to yourselves, “I see what he did. He played a little trick with the semantics of a couple of words but he REALLY didn’t do anything”.
In fact, just by identifying the possibility that Risk is no longer Uncertainty, I changed everything! Think about it. You are now able to identify that Risk does not mean Uncertainty. It means something entirely different.
In fact, it means something that is calculable, something that is known yet it is not a guarantee. To that degree, Risk is now much closer to Chance. The meaning of Chance is “a possibility of something happening”. Exactly!
There’s now a chance or possibility of something happening…not a guarantee of something happening the way we see it but something known. This is completely opposite of Uncertainty which is “something that is not known”, “not being sure”. Again, Exactly!
Risk is the exact opposite of Uncertainty
Uncertainty has NOTHING to do with Risk. It is COMPLETELY opposite of Risk. Uncertainty is a complete gamble. A total speculation. Not only do we not know if anything about Uncertainty will turn out our way…we don’t even know whether or not there’s even a little thread of something turning out our way.
That’s NOTHING like Risk. In fact, if we approach Risk how it needs to be approached Risk turns into a matrix of ‘potential’ calculable outcomes. These outcomes may not be at the level of potential success that we are comfortable with or that make us excited to take a chance on but at least we have something that is defined, something calculable.
So it’s really not about Risk itself at all per se, it’s about quantifying what is considered to be Risk. This suggests action that is taken to learn something.
Once we learn something, we are able to calculate potential outcomes or at least the chance of potential outcomes. By doing this, Risk isn’t even Risk anymore. It’s just a bunch of outcomes that have a better or worse chance of happening.
In addition, the more work we do to discover the underlying aspects of the things that remain unknown, we start to determine the probability of these things happening…further driving away Uncertainty and quantifying the possible outcomes turning them into ‘calculated’ Risks.
Identifying possible outcomes
So how do we move away from Uncertainty and move towards identifying possible outcomes? Coincidentally, this is something that I spend a significant amount of time on with the entrepreneurs that I work with because removing Uncertainty and moving towards calculated Risk is a HUGE part of entrepreneurship.
When facing what you believe is Uncertainty consider the following:
1. Make some initial hypotheses and assumptions of how you believe things to be…and test them!
When you don’t know what you don’t know, you need to at least put a stake in the ground somewhere in order to establish a basis for consideration. The point here is that in order to get anywhere you need to start somewhere!
That said, develop a few hypotheses and test them to see if they are true OR to learn something. The beauty of testing and experimenting is that you will learn SOMETHING. Your hypotheses and assumptions will either be right or wrong but you WILL learn something.
With this now found information from your testing and experimenting, develop some new hypotheses and assumptions in what you now perceive to be the right direction and test and experiment again. Rinse and repeat!
2. Take small actions in each of what you would consider opposite directions
Seeing that there potentially is a high level of Uncertainty when immediately doing something new, look at taking a couple of initial small actions in what might be considered opposite directions from one another.
Usually it would be somewhat improbable that both directions would yield a positive indication of potential success so examining opposite directions is going to tell you something…usually fast! Not that there is always just one ‘right way’ but chances are that there are a lot of ‘wrong ways’ and a couple of ‘better ways’.
3. Seek feedback, insights, information…Incessantly!
While something is still uncertain to you, keep an open mind and try to find clues of success from whatever source you’re willing to consider. No one says that you need to go it alone. Success really does leave clues, so be open to find them from what others have done.
4. Set an ‘Affordable Loss’ limit
Before doing ANYTHING, always establish a limit upfront on whatever resource you are dedicating that you are willing to lose in trying something. This can be money or time but when facing what you believe to be Uncertainty or even a high level of known Risk, make a determination upfront as to what you’re willing to lose in pursuing that opportunity. And when you reach that limit, get a colleague or friend that doesn’t have anything vested in the activity to evaluate with you what happens next.
5. Identify what success looks like…BEFORE you start!
Have some idea of what you’re looking for before you go looking for it. Most of us embark upon these different journeys in life, or in business, without ever identifying upfront what success would look like even if we got there. Therefore, everything to us along the way looks okay or everything to us looks unsatisfactory.
If you’re starting out and facing Uncertainty, don’t let Uncertainty be the thing that could best describe your vision or goals. You do have control of what your vision and goals are so make sure those are laser focused so you know along the way if you’re on the right path.
Why tolerate any Uncertainty in areas that you can actually turn into known Risk?
Conclusion
Over the years I have found that these same tactics above work remarkably well in regular everyday life. Implementing them removes the anxiety of the unknown and uncertainty and identifies the possibilities, remote as they may be in some cases.
One of the biggest problems in the human condition is anxiety and much of our anxiety is caused by the unknown. Remember, our hard-wired brain is made to react to the unknown and when it senses the unknown, which we now know is Uncertainty and NOT Risk, it raises the alarm and triggers our flight reaction.
Therefore, in order to reduce anxiety caused by Uncertainty we must work to identify calculable outcomes. We must work to go from Uncertainty to Risk. And when we get to Risk, we must embrace it!
