As people, we like to create amazing things. We like to build things that have value. Making our mark on the world adds a great sense of worth to who we are and what we are about.
And so we like to take risks, because certain risks carry with them valuable rewards to help us achieve great things. But finding out which risks carry the best rewards can be tricky, almost to the point that it would be worth building a risk-analysis machine.
Sadly, doing so would break it immediately.
My Risky Mornings
Every morning I recite 20 cognitive biases that affect clear thinking. It’s part of an effort, I hope, to more easily recognize faulty thinking and choose better sources of information.
Each time I recite them, I end with the Zero-Risk Bias. Quite simply, we tend to avoid risk when choosing a course of action even when that option might be the better choice.
After all, nothing great is achieved without risk. We take risk proposing a great idea to our boss, starting a new company, or speaking out against injustice. This computer I’m using now is built upon countless incidents of risk-taking.
Which is why risk is so important. It helps us achieve greatness. At the same time it’s… well, risky. The fact that risks are both necessary and potentially costly would seem to be a great reason to build a risk-analysis machine. Unfortunately it would be built broken.
A Broken Risk Machine
Imagine if someone built a machine that would take in all the information available on an idea and determine which options you should choose in any given scenario. It would read in every piece of data, evaluate each option, calculate the risks involved and the rewards they would generate, and tell you which action to take. It seems like a dream. And by it’s nature, it would be broken.
The fact is that taking risks is risky. It’s part of what gives you an advantage. Apple, Google, and Tesla didn’t become great because they did what everyone else did. They did something different. They took bigger risks.
So if you had a machine that told you what risks to take and you always did what it said, you would remove the risk and therefore, the advantage. You would often have to ignore it’s advice just to take the right risks.
Life is inherently risky, but taking smart risks can have great benefits. If we’re really passionate about something, we need to determine if it’s worth the risks to pursue it. Achieving great things requires taking big risks.
We need to come up with good ways of evaluating good risks vs. bad risks. By evaluating the likelihood of a worst case scenario and how costly that is vs. the likelihood of a positive outcome and how rewarding it is, we can take smart, calculated risks.
We also need to grow risk-taking muscles. Taking big risks right off the bat might really unbalance the risk/reward of a situation, but starting out small and taking bigger and bigger risks, risks that are well thought out and properly calculated, can help us achieve a higher rate of success.
Life is risky. The best risk analysis machine is the one in your head. Train it. Improve it. Calibrate it. Then find the right way to take the right risks to make your life greater, happier, and more rewarding.