When Risk is Right: Important Lesson for MBA Applicants

In business and in life, it is easy to become risk-averse- cautious and protective of the success and happiness that you have already found.

On a macro level, I believe that the recent global recession has made this mindset more common, as many have experienced firsthand the loss of an investment or the failure of a fledgling business.

I would also argue, however, that risk-taking is essential to successful emergence from that global recession.

Avoiding risk might pad your savings account a little or cushion your emotions, but it can also lead to stagnation and complacency, two words that you do not want to apply to your life or your economy.

The majority of today’s most successful people found success through some sort of risk, and often through a very large amount of risk.

For just a few examples, take a look at this Forbes slideshow, highlighting 39 risks and rewards experienced by now-successful entrepreneurs, politicians and celebrities. I wish I could tell you that risk-taking will always lead to such success, but that would contradict the very definition of the word.

What Good Risk Taking Has in Common

I do believe, however, that three traits ground the wisest and most successful risks:

Passion

This one might sound trite, but it is so important to truly believe in what you are doing. The best risks chase a goal that you have always dreamed about or an idea that you cannot stop thinking about. If you are following a real passion and interest, you will be better off for taking the risk, even it does not end as you had hoped.

Planning

Good planning should balance passion to prevent rash or ill-founded decisions. We romanticize risk as a spur-of-the-moment impulse, and while some risks are indeed very rapid, many significant risks require significant planning.

Do not neglect this stage, as mundane as it may seem. Large leaps of faith- such as a career switch, a cross-country move, or the launch of a new business- typically demand months or years of planning.

Willingness to Fail

Though it ruins the alliteration, this is arguably the most important of the traits I have listed. The best risk-takers realize that success is not the only positive outcome and embrace failure as yet another opportunity.

Failure can create chances for personal growth, teach critical lessons for future success, and perhaps lead to new and unforeseen paths. The best risks provide something to gain or learn through both success and failure.

Conclusion

Right now, ask yourself if there are risks that you have always dreamed of taking. Inevitably, as soon as you begin to think about such a risk, your mind will begin ticking off reasons why you cannot take such a step.

Take the time to think past those initial obstacles and ask yourself if they are really as formidable as you think. Would taking this risk allow you to follow a passion? What are the positives that would come from success? What are the positives that could come from failure?

Finally, what do you risk by not changing the status quo? Is that a risk you are willing to take?