There’s a reason that we don’t say we’re in the Risk Elimination business. To be certain, you shouldn’t take necessary risks. That’s carved in stone. However, what makes a risk necessary is something that I’m rather more slack on.
Risk Elimination is a sisyphean task. No matter how far you drill down and account for eventualities, there’s always going to be something that is out of your power to control. You can’t eliminate the risk of injury bombing down a favorite ski run. But you can manage the risk to decrease the chance of an injury and to downgrade potential injury from a cracked skull to a broken wrist. That’s why we engage in Risk Management.
As it turns out, Risk is something that we all need. Not only that, it’s something we want.
- It’s fun.
Humans have an innate drive to work at the edge of their abilities. The entire $9.1 billion (and growing) video game industry is based around the fact that we are most focused, most engaged, and truly enjoying ourselves when we are pushed just to the limits of our skill, and maybe a little bit beyond. This “edgy” behavior is more than just the cognitive task loading of virtual running-and-gunning, it also covers thrill-seeking and adrenaline rich activities like skydiving and performance driving.
2. It’s necessary.
You can’t fail to meet a goal if you don’t have a goal, right? Setting a goal – whether you’re trying to train your dog or win a NASCAR race – means that there’s always a risk that you will fail to meet that goal. You’re not going to get very far in anything if you’re completely risk-averse. The willingness to take smart risks is the basis of most business decisions.
Edge-of-capability is also where the best educational experiences happen. The best lesson plans involve pushing the student just out of their comfort zone in a controlled, safe environment where if the Risk of Failure turns into the Actuality of Failure, there are safeguards against disaster.
And frankly, even if you were to just spend all day in bed you’re taking some risk. It’s just not healthy.
3. Sometimes there’s not a 100% right answer.
This is the one that gets us analytical people wrapped around the proverbial axle. Trying to find the absolute right answer can be an impossible thing in the real world. There are tradeoffs whether you take the highway or the road less traveled. Risk Management is about evaluating the probability and severity of outcomes rather than being paralyzed by the inability to find the 100% correct choice.
4. You can’t see everything.
“Hindsight is 20/20” – that old saw exists for a reason. Very frequently we run into situations where we’re blindsided by the unexpected. How do you even eliminate a risk if there’s no way of seeing it coming?
And again, there is the issue of analysis paralysis. Often it’s less risky to do something rather than continue to dither about getting all the information.
5. The illusion that you can eliminate all risk is more dangerous than the actual risks.
I love the movie Die Hard, and it’s a pretty good example of this, bear with me. So you’ve got the villain, Hans Gruber, with his excellent plan and lean team of bad guys. He thinks he has every contingency planned for, every risk eliminated. The LAPD and FBI are doing exactly what he anticipated and the hostages are appropriately cowed. Hans believed he had it all taken care of. Consequently he was not prepared when John McClane cowboy’d-up to start wrecking his party. If Hans had perhaps been a little less cocky and willing to realize that his plan might have unforeseen problems then he might have succeeded (then again he’s the bad guy so we want him to fail, but I think you see what I’m getting at.
Risk Management is part science and part art. It should be something that keeps you nimble, not dragging you down into an infinite loop of analysis and elimination.