Risk to Grow

Every one of us will face risks in our lives, and we frequently must weigh the risks and rewards of a situation to decide the best option. Before we further dive into the psychology of risks and look at some fascinating insights into how and why we make these decisions, it's important to consider the definition of risk. The dictionary defines it as "the possibility of something bad happening." This is undoubtedly true, but it focuses solely on the negative aspects of taking a risk and less on the potential positives and opportunities. This is reflected in how our minds assess risk, where we may overly emphasise the risk and less so the reward.

To explain this point further, here's a video insight from Toronto Blue Jet's physician and high-performance specialist, Dr Dehra Harris, from our digital library. (For a free month's access click the video and enter LINK23 at checkout)

?"So, if you think about the unbelievable task of taking all the information you get in a single minute, even us sitting across from each other, we hear sights, sounds, the last thing we said, and our amazing brains have to funnel that down into only the parts we need to remember. So, one of the best ways we do that is we attach emotion to it, right? So, when your brain's looking at all of these things to know, it can say, oop, that one, that one that was when I felt afraid, or the one that was when I felt really happy. So, it's like putting a little flag on top of an endless array of tiny little mountains of memories. Okay, so we use the emotions. Failure, especially in a public way or something like a sport, puts a very large flag, right? So, when your brain goes back in, and it has all these mountains to choose from, it goes to the one with the really big flag, and then over and over, that happens. When you need to understand a process, having a failure flag and an emotional thing is good because it tells you, alright, I want to learn what happened. Once you understand what happened, then it needs to be new targets and new things to work on, right? It's not endlessly reviewing the failure. That's what our brain will do. It's fine to understand it. And that's part of the learning mechanism, is that your brain says, go back, understand this. The key is, once you understand it, move on. And that's the place where a lot of people get stuck."

Dehra explains how the process works in our brains. It's easy to see how this can work well, especially when you consider most of our risks in the past were physical – you needed that big flag next to the roar of a lion because it was a physical risk you needed to avoid and didn't need much more consideration. However, today, where many of our risks are more psychological in nature, some risks are worth taking and shouldn't be avoided immediately because of a previous negative emotion attached to that stimuli or situation. As Dehra describes, you can get stuck if you listen to these flags without questioning and challenging them. For example, if you once had a negative experience speaking in front of an audience, your brain will assign a negative flag to this and see it as a risk, meaning you might not want to speak in front of an audience again. But if you only listen to that flag and don’t see the benefits of overcoming that risk, you’re simply taking a different risk: the risk of staying still, avoiding growth and the potential feelings of pride and achievement. By reframing and creating a more balanced analysis of risks, you can identify the risks that are worth taking because of the potential benefits.

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Key insights:

·????????? Our brain attaches flags with emotions to things we have experienced, which helps us identify risks.

·????????? We sometimes need to challenge these flags. Otherwise, we will lead a risk-free life with few opportunities for development and progress.

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Building on this idea of challenging our instinct to avoid all risks, Stuart Worden, Brit School for the Arts and Music principal, describes an adventurous mindset and why this is valuable.

"I've had some amazing, amazing people work at that place that have helped me. And the staff are extraordinary. They are so courageous. They come up to me, and I usually never say no to any of their ideas. So someone says, oh, we're going to do a dance piece, and we're going to do it about the jungle in Calais. No school does that. We're going to do a music piece, but we're going to do about HIV, we're going to go and work in a prison, we're going to go to a hospice and work with people in the last few months of their lives and write songs with them before they die. Cool, let's do that. So if you've got the courage to say, okay, let's really have a conversation about… and art does that art's, like full of like, you know, you have to be brave artist. No one wants to see pedestrian art. If you go into London along Piccadilly, no one buys those paintings that are outside the Ritz. If you want good art, good art is only through taking a risk and not trying to be the same as anyone else."

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Similarly to the first insight, this demonstrates that listening to our fear of risks can be restrictive. If everyone always plays it safe, then we won’t get the progression we have seen. Avoiding risk is harmful from an individual and collective perspective; nearly every positive change in any field likely comes from someone taking a risk.

We have established that we must consciously take these risks, often against our instincts. Professor of Behavioural Decision-making Wandi Bruine de Bruin describes how we can be more objective in our decision-making by creating a rational framework.

"How can leaders balance risk versus gain? I think that when we make decisions, we can be overly focused on the risks without recognising the gains. So let's say you lose ten pounds. Then you would worry more about having lost those ten pounds than you would be happy about having gained ten pounds in another situation. So we worry more about losses than about gains, and sometimes that can harm our decision-making because really choosing between options means thinking about the losses and the gains that they might bring. So, to really carefully balance the risks and the gains, I think the recommendation from decision research would be to carefully look at each option systematically and rate how much you like or worry about each risk and each gain and then take the average rating that you would give. And then overall, options that have relatively good gains compared to the risks will have better ratings. That's a systematic way to incorporate the risks and the gains."

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A rational process can remove biases. By putting things down on paper, you can more objectively consider if the risk is as bad as the flag in your head makes it out to be and whether the upside of the gain is worth taking that risk. Moreover, by setting it out in a methodological way like this, we can consider the likelihood of the risk leading to a negative outcome. Often, the thought of a negative outcome without challenge can make it seem more likely to occur. By acknowledging that our brain can be naturally risk-averse and that this is restricting, this process is an excellent way to avoid entirely risk-averse behaviours and strike a balance between safe and risky choices. Naturally, this is more difficult in time-pressured scenarios where you must make split-second decisions, such as on a sports pitch. However, implementing this rational framework could prove extremely helpful with more drawn-out decisions.

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Key insights:

·????????? Risks are necessary at times for growth and progression.

·????????? Objectivity can help in knowing which risks to take.

·????????? Objectivity can be worked towards using a rational framework when making decisions to weigh the gains and costs.

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Other decision-making methods can also be beneficial. An alternative approach is to take a step back, look at the decision from a broader timeline, and consider the long-term repercussions beyond the immediate ones. For example, a risk becomes significantly less significant if you take a five-year timeline rather than a short time frame. Another aspect to consider is the regret of not trying; regret grows when you have unanswered questions about what you could have achieved if you had taken more risks.

By taking a more holistic look and looking at the sum of 'risky' decisions compared to safe ones, it can often become apparent that more risky decisions are required to achieve your goal. A great example is from cycling. Sir Dave Brailsford CBE, General Manager of Team Ineos (formally Team Sky) describes how the team's perceptions of success and failure were altered to encourage more risks during races.

"For a while in Team Sky, when we started out, we noticed that maybe there was an attack on a hill by one of the top riders. Sometimes, our guys they would hesitate a little bit because you've got a split second to think, right, I'm on the limit here. Shall I go? Could I still ride for another three or four k's at this level, or no, I'll play safe. I'm all right here; I'll stay here. And so we tried to think about in order to succeed, ultimately, if you won a race, you'd have taken constantly making decisions, and those decisions will be about a risk or safe. Risk safe. Risk safe. And we found that actually when you won a race, you've taken quite a few key decisions, which are risk decisions. You don't know what the outcome is going to be, but then you've done it again and again, and ultimately you get to the win. So what we're trying to do we try to reframe the guy's thinking. And what we tried to do is said right as we're going along through the race, you can take a risk or you can play safe. And if you play safe and come in at, let's say, 15th in the race, then, okay, that's the position you get there. If you take a risk, you might take another risk and go on and win, but equally, you might take a risk, and it might not work at all, and you might come 100th, and it could be catastrophic. So what we'd like for you as a rider to think is that we would see the first as total success, we'd see the second as partial success, is how we term it, and a third as failure. And I think they were framing it very much in a view that 15th actually wasn't too bad. I'm all right here; I've done okay. But it wasn't. We would prefer to say, look, that's failure. Try and take a risk, take a gamble, and we'll then – it's not recklessness, but it's calculated decisions, and we'll see that's partial success. So we'd much prefer to do that. You get a pat on the back for that. Running 15th, playing safe. No, thanks."

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By reframing success and failure, risks can seem less daunting because the choice to take a risk is portrayed as more successful than playing it safe, regardless of whether the risk pays off. Effectively, safe decisions may prevent worst-case scenarios, but to win, risks are necessary. To strive for this ultimate success, the possibility of catastrophe must be accepted and not punished in favour of safer decisions. Moreover, Dave describes how it's not one decision that will dictate winning a race but multiple. This is beneficial because it takes some of the weight off each decision –– maybe you have four decisions, and in three of them, you take the risk; in one, you play safe. You can apply this beyond sport – don't see the decisions you have to make as all-or-nothing risks. You will likely have to make several decisions to reach your goals, and not one risk will guarantee success or failure in whatever you aim to achieve.

Key insights:

·????????? Risks can lead to a worse outcome than playing it safe, but you can reframe what is defined as success and failure for yourself.

·????????? By framing a risk and a negative outcome as closer to success than playing it safe and achieving a slightly better outcome, you can enable braver decision-making that may lead you closer to your end goal.

·????????? Most goals will require a sequence of decisions – you do not need to take risks every time, and there is rarely one all-or-nothing call that will solely determine the outcome.

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While much of this article focuses on how we are naturally risk-averse and that we should change our thinking and processes to take more risks, it is not the case that we should unthinkingly take risks in all scenarios. Snowboarder Lindsay Jacobellis was in first place in Turin in 2006, heading towards a comfortable gold medal when she prematurely tried a fancy flip to celebrate her success before crossing the line. Lindsey landed badly and lost her gold medal as her opponents passed her. She had likely taken some risks to get into the gold medal position, but this last risk backfired. She later won gold in Beijing, learning from her previous mistakes. Whether in sport or any other field, knowing when to take and not take risks is vital and something you learn over time and through experience.

Wall Street trader and neurobiologist Dr John Coates explains why continuous risk-taking occurs and why it usually goes wrong in the end.

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"There's a well-established phenomenon called the winner effect in which an animal that's won a competition or a fight is statistically more likely to win the next round of competition it goes into. And this is a very robust finding in animal behaviour. They've documented in about two dozen animal species. I think that's prima facie reason for believing that something similar might happen in human activities, particularly in sports, but also in other forms of competition in the corporate world. What they found when they went in, because they found what happens, is that an animal that's won a competition is statistically more likely to win the next round of competition. They went in looking for the mechanism that might be driving this, and what they found was that the anabolic hormones of the animal were rising, and this was preparing them for competition, so that animals going into competition, their anabolic hormones would rise, the winner would come out with even higher levels, the loser with lower levels. So, the winner would go into the next round of competitions already with this ripped on roids, so to speak, naturally. And that gives them an edge, helping them to win again. So it appears that we've got Harvard within our physiology, what amounts to a self-doping mechanism where winning leads to higher anabolic hormones, which leads to increased chances of winning again. We think what goes on that the winner effect can cause people to become so cocky and euphoric that they take on more and more risks until eventually, they're taking ill-considered risk, too much risk with bad risk, reward trade-offs. You can see this in financial traders that are on a winning streak. You can see it in athletes that suffer from the red mist, I think it's called. You can see it in political leaders, military leaders, and we think this is a physiological mechanism of the winter effect that underlies it until eventually, you're taking so much risk with such terrible risk, reward trade-offs that you blow up. And that's kind of a common pattern we see for people. It's the parabola of classic tragedy. People reach too far and then suffer the consequences."

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It seems evident that taking risks all the time is not wise; otherwise, everyone would do it. Understanding the neuroscience behind this can help you to be more reflective in your decision-making and be aware not to fall into the process of taking ill-advised risks off the back of previous successes. The best leaders will take risks to a certain point but won't let success cloud their future judgment as this can result in overly risky decisions.

When I was playing cricket, in the early days of T20 cricket, teams would take too much risk because they had to score from the get-go. Our Leicestershire team learned that combining a strong hitter with someone who could rotate the strike at the top of the order led to more success than two hard hitters because it was a more measured risk. As the innings continued, the risk increased, this approach meant that we had more wickets in hand than if we’d taken risks from the beginning of the innings. We were going at about 75% risk for 17 out of 20 overs, and then 95-100% risk for the last three overs, compared to other teams who were going at 85% risk early and then sometimes crashing and burning before the game got going. This approach led to four consecutive finals for my team, with two out of four wins, and undoubtedly gave us an edge over other teams.

One way to create this measured approach to risks is to talk to different types of people in your field. Consider the opinions of people you would consider risk-takers and people who usually play it safe – hearing both the pros and cons of risk-taking behaviours and different mindsets around decision-making can help you to strike a balance and know when and when not to take risks. It's essential to consider your strengths and weaknesses alongside the costs and benefits– if the costs are high, but you have a high level of skill in the task, then this is less risky because the chance of the costs coming to fruition is lower due to your expertise.

One team that seems to have consistently mastered the art of taking the right risks, especially under pressure, is the New Zealand men's rugby team, the All Blacks. James Kerr's book Legacy focuses on their lessons and how to apply them to other areas of life. James shares one of those lessons in the following insight.

"If we talk about embracing expectation and the courage that that takes. I think one of the secrets, if you like, that the All Blacks have done so well is they've realised that people play best when they're really enjoying it, when they're celebrating it, and by bringing a sense of gratitude and a sense of the moment and the privilege that it is to kind of pull on a black jersey and run out there. That embracing of that expectation creates a space where people will express themselves, try new things and keep pushing. That kind of intuitive competitive advantage, if you like. Is courage the right word for it? Is it just kind of fronting up and putting on a brave face? I think it's more about realising that there's a lovely phrase that pressure is a privilege. That if you're not under pressure, it's like riding a motorbike and the wind's not in your face. What's the point? These are the moments we live for as competitive human beings in sport. Those are the moments you live for, and it's a privilege to be part of that. But embrace that privilege, walk towards the flame and kind of make the most of that opportunity because they don't come around that often. And that mindset isn't really about just being brave; it's actually genuinely about enjoying it. And that's an incredibly resourceful environment, personal environment to be in, because you're relaxed, you're enjoying it, you're playing, and you're playful, you're connected in a different way and much better than sitting there completely nervous, thinking, being risk averse and hoping I don't make a mistake. So, courage would be sitting there going; I hope I don't make a mistake; I'm really brave to be here. I think the opposite is just embrace it and be grateful for the privilege and make the most of it."

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Here, the focus is less on considering a specific risk but just a general mind state that alters how you view risks and decisions or performance in general. Risks, as we have touched on, often have negative connotations, and a large part of that has to do with the pressure of having to make these decisions. But you change the way you think about pressure and consider it a privilege; it can lead to improved performance and a more enjoyable personal experience, with both these factors positively influencing the other.

Key insights:

·????????? Continuous blind risk-taking will eventually lead to a downfall.

·????????? Balance is required when taking risks, and knowing when to and when not to take risks is a skill that can be learned through experience over time.

·????????? Considering both high-risk and low-risk people's opinions can help to create a balanced view of a situation that factors in both sides.

·????????? Viewing pressure and the obligation to decide on risks as a privilege can improve your enjoyment and likelihood of success.

Hopefully, this article has been interesting and helped you consider how you think about risks and how you may assess them in the future. So much of what we naturally think about taking risks is through a negative lens, and by shining a more positive light on it whilst still taking a balanced approach, you may find yourself taking more risks and reaping the rewards that this can bring.

This article is taken from my recent podcast episode Risk to Grow - click the image below to listen and subscribe on Itunes.

I hope you've enjoyed this article - please do share it with anyone who you think could benefit. I'm passionate about the role that our mindset plays in our performance and if i can help you or your business in any way with keynote speeches, webinars or access to our digital content then please drop me a note.

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