When an opportunity presents itself or a tricky decision has to be made, you need to balance the risks against the possible rewards. When assessing risk, there are five key questions you need to ask yourself.
- UPSIDE/DOWNSIDE: compare these by preparing two simple lists and then share with someone entirely independent of the decision.
- CONTEXT CHECK: does this decision fit with your business strategy – with longer term benefits – or is it opportunistic – just a one-off gain?
- PAIN THRESHOLD: if it goes badly wrong, can you endure the cost, in terms of reputation, morale and cash?
- NICE TO HAVE OR MUST HAVE: on a scale of 1-10 how does this opportunity score?
- GUT INSTINCT: after reviewing all the facts, consulting the relevant people, how does it feel (confidence) in your heart and head? Is the opportunity being driven by ego or a solid commercial imperative?
Andrew B Morris is Chief Executive of the Academy for Chief Executives, helping businesses to accelerate growth through better leadership. Andrew describes himself as a creative businessman, who enjoys meeting people from all facets of life. His mantra is ‘take your job seriously, but not yourself.’