Risky Business: How to Be Risk Savvy

What’s the best way to get people to do something? Terrify them. Marketers and advertisers are basically pros at this when trying to scare you into making a certain purchasing decision (anyone remember Super Size Me?). Gerd Gigrenzer, author of Risk Savvy: How to Make Good Decisions argues that being risk savvy is important in order to protect yourself from being manipulated by politicians, marketers and others who may not always have your best interest at heart. This does not imply that you should learn how to avoid taking risks, the key is to be clever about choosing which risk is worth taking and which risks you should avoid.

Pay Attention to Detail

When thrown a bunch of statistics, many people tend to take them as the truth and forget that statistics can be messaged to produce different effects. It’s not that the numbers are wrong, it’s that they are presented in a misleading manner.  You don’t have to be a statistical wiz in order to decipher what’s accurate or not, and trusting your gut can get you farther than you may assume. Gigrenzer notes in his book that over half of our big decisions are made by using our intuition and feeling things out. “A gut decision is not arbitrary, or a sixth sense. It’s based on lots of experience,” he concludes.

Don’t be a Negative Nancy

We tend to over-exaggerate the consequences of what might go wrong in taking a risk. When thinking about a risk gone wrong, we often see the situation from a birds-eye view where we are passively standing by while things take a turn for the worse. Instead, acknowledge your ability to intervene and change the situation to work out in your favor. Taking risks does not imply that things will always go smoothly and sometimes adjustments to the master plan need to be made.

Be a Quitter

Although there is a freeing notion to taking risks, they come with rules too. On the bright side, it may even prompt you to take a risk knowing that there is an option to back out. Set up some guidelines or rules of thumb on what you can tolerate but know to pull the plug. It’s also important to consider taking one risk at a time. There is a fine line between going big and going overboard. Tackling one risk at a time rather than putting all of your eggs into one basket may be a safer bet in a situation that already makes you feel uncomfortable.

Risks come in all shapes and sizes ranging from buying a new home to, say, taking a digital interview with your dream company. Regardless of the severity of the risk, trust your inner greatness and take a leap of faith.

Image used under Creative Commons by Paxson Woelber.