Harvey Mackay

The Right Way to Take Risks

Golfer Adam Scott had a two-shot lead during the final round of the Genesis Invitational Golf Tournament at the Riviera Country Club in Los Angeles last month when he found trouble and a bunker on the 15th hole. Knowing a safe shot might cost him the lead, he changed his mind.

“I thought, ‘Well, you can maybe win the tournament if you hit a great flop shot here.’ So I thought I might as well go for it,” Scott said after winning the tournament on Feb. 16. The flop shot dropped to within five feet of the pin, allowing him to escape with a bogey and not lose his lead.

We all must learn to take calculated risks. When I am speaking to corporate audiences, I always say, "Sometimes it’s risky not to take a risk. Let me put it differently. If you walk backward, you’ll never stub your toe."

The biggest lesson I can pass on is to not be afraid to take calculated risks. If you win, you will be happy. If you lose, you will be wise.

Some people are born risk-takers. They are more comfortable making decisions that may not work out, but they usually have -- or come up with -- a plan to get past it. For others, making more pragmatic decisions is more in line with their comfort zone. But those folks also run the risk of regretting actions they did not take.

Successful people have learned how to refuse to let fear get the best of them. You can learn to control your fear and rise to reasonable challenges. There are some strategies that can help you reach that point.

Start by analyzing your memories. Look back over your life. What situations have made you feel afraid? Were there common denominators? Perhaps most important, when was the last time you were afraid of some action and did it anyway? Sometimes, taking the plunge is the only way to see if you made the right call.

Consider your responsibilities. Examine your priorities at work and in your life. If some activities make you fearful, ask yourself why you are afraid of them. Past experiences that ended badly, taking chances when you couldn’t calculate the possible outcomes, concerns about how staff or management will react -- all these factors need to be evaluated to assess how much risk is acceptable.

When a situation makes you nervous, try to think of the worst outcome that could realistically happen. Examining the possibilities ahead of time will prepare you to avoid pitfalls. Chances are, the reality won’t be as devastating as you fear. But it is important to think about how you would react if the outcome could potentially hurt your business or career irreparably.

Then shift your focus. When you’re confronted by a task that makes you fearful, stop and think about all the benefits it will produce in the end. Focus on those instead of on what’s making you feel scared. That strategy may lead to better methods and outcomes. Involve those with whom you are working or whom you are supervising to get their opinions and agreement. When the whole team has skin in the game, previously unidentified risks may be exposed and addressed. The likelihood of success improves.

Finally, look at some of the risks you’ve taken in the past. If most of them turned out well, figure out what made them work. Think about what actions you took that ensured success, and how you can duplicate those actions and decisions in other situations. Don’t ignore the failures though, because you should also work to avoid repeating the same mistakes.

Mark Twain lost more than one hard-earned fortune by investing in get-rich-quick schemes. According to one story, Twain once met a man seeking financing for his new invention. The man explained his machine, but the famous author had grown skeptical of such sales pitches and declined the opportunity to invest.

“I’m not asking you for a fortune,” the inventor persisted. “You can have as large a share as you want for $500.”

Twain shook his head. The invention just didn’t make sense to him. As the man sadly walked away, Twain called out, “What did you say your name was?”

“Bell,” he sighed. “Alexander Graham Bell.”

Mackay’s Moral: Don’t risk getting your “bell” rung like Mark Twain.