Welcome to this issue of "Dr. T's Timely Tips" by Dr. Tony Alessandra. Please send your feedback to DrTony@Assessments24x7.com!

Unreasonable Risk-Taking

Unreasonable risk-takers are individuals who tend to overemphasize the resources they have available or can acquire to accomplish their objectives. Or, they're the type of people who underemphasize the barriers that are likely to get in their way.

There's been a lot of emphasis in the past decade or so on risk-taking as a positive trait of high-achieving individuals. Most corporate environments don't encourage risk-taking. Neither do government bureaucracies. So "unreasonable risk-taking" might not seem like much of a problem, except that we're talking about increasing power and influence with others. That demands that you take risks, provide leadership, and create visions for others. So risk-taking comes with the territory of adaptability.

This is just a note of caution to take reasonable risks. Psychologist David McClelland and others who have researched high achievers say the most successful individuals take moderate risks which have a 30 percent to 70 percent chance of being accomplished. Taking a risk on something that has less than a 30 percent chance of success is considered reckless behavior rather than reasonable risk-taking. This is especially true if you're risking the resources of other people in the process.

Accomplishing something which has over 70 percent chance of success is essentially not taking a risk in the first place. Assessing risk involves both looking at what positive factors are in the plan, as well as the negative factors that stand to get in the way. There's usually no way to do an ironclad assessment of a plan. Oftentimes, the factor that weights the balance in one direction or the other is the person taking the risk. How much follow-through do you have? How much energy are you going to bring to the enterprise? If the going gets tough, can you count on yourself to keep going?

A great majority of businesses begun by individuals in this country fail within the first 5 years. Starting a new business is always a risk, but a good business plan upfront will help assess the chances for success. According to Michael Gerber, who runs a nationwide training company for fledgling entrepreneurs, the number one reason for the failure of startup businesses is underestimation of the resources it takes to keep a business going. Entrepreneurs underestimate the capital required, the time it takes, and the expertise it takes to run your own business. Yet every year, hundreds of thousands of people hang out their sign, print their business cards and wait for their first customer or client.

The good news is that tens of thousands of those businesses do succeed. That's because they've taken a reasonable risk.

Here's to more personal insight,


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