What role does risk have in your success? Risk is the four letter word that kills more dreams than any other. Risk can help you succeed or it can guarantee you will never be successful.
Today, risk is part of everyone’s life. How you manage your risks determines your success in every aspect of your life. The more you know about how you handle risk, the more self-aware you become. With self-awareness comes wisdom, self-esteem, and trust.
I’d like to share how you can make risk an ally in your life. The information I’m sharing, I’ve learned interviewing over 16,000 leaders around the world. This is practical information that can help you achieve your dreams, no matter what size they might be. Here’s my take on how to look at risk as more than just a four letter word.
R is for resources. What do you know that others don’t? Resources are the people in your life who want to help you succeed. Resources also include money and capabilities that help you succeed in both good times and bad. They can be ideas that help you develop your own philosophy in life.
Successful people are very good at getting others engaged in their causes. They are very good at finding resources when others see only obstacles. I have a good friend who is very good at finding resources. He almost never has to invest his own money to get amazing results from his causes.
I is for intelligence. How smart are you? It’s funny, many successful people have average intelligence. They make up for it by being curious in almost every aspect of their lives. They are able to talk with anyone on almost anything.
One of the critical elements of maximizing your intelligence is to never grow too smart to take good advice from someone who knows more than you do. My most intelligent clients struggle with knowing it all. To be successful, we have to know what we don’t know.
These intelligent people are incredibly gifted, but are terrible at motivating and inspiring people who aren’t like them. Many times they lack the common sense of a person who is working hard to make their way in life.
S is for strategy. Not strategy where you are able to see the future and then move forward. Strategy to me is the ability to get things done in the right order at the right time. It’s having the ability to connect the dots and then take action on what you see.
Strategy, when it comes to risk, also means knowing what not to do at the wrong time. Many successful people have made their fortunes by hanging on just a little while longer. They are very good at understanding human nature. They optimize their ROI by not getting greedy at the wrong time or place.
It’s just as critical to have a strategy for saying no as your life continues to get more active. In our society, we honor people who are risk takers. We tend to forget those who just keep moving forward in spite of the odds. They end up successful because they stuck to what they do well.
The K is for knowledge. Self-development can mitigate almost any risk you might face. Successful risk takers are good at understanding what knowledge a situation might require to be successful. They invest time reading and talking with people who know the challenges they face in their life. They are lifetime learners. As Ross Perot said; leaders are readers.
Today, information and what we know is changing so quickly, it’s important to be constantly learning. How much time would you invest before going on vacation, buying a new car, or picking the perfect partner? You must learn to invest in staying current in what’s important to you and your family. Being knowledgeable means you’ve done your homework. You leveraged the people around you for help. You have a good understanding of what is required to succeed in any situation. The more you know, the smaller your risk when you make a decision. The wealthiest people I know are very good at managing risk. They do it by knowing more than the other person. They also know themselves.
How much time do you invest in learning the critical information in your field? I believe that understanding the critical 10% of any field can give you an edge. It’s critical to understand what knowledge helps you reduce risk and create upside.
Risk is as much about our psychology as knowledge. A person with a strong understanding of psychology is a better leader, parent, and friend. This is a critical skill that can help everyone be more successful.
This Friday,we will share our thoughts on a great serving leader Dr. Martin Luther King Jr. See you then.
Next Tuesday I introduce you to a man who taught me how to better understand the psychology of leadership, risk, and investing, Charlie Munger, Vice Chairman of Berkshire Hathaway.