We finalize the Module Two series with Risks. In our guiding metaphor, we can see risks as the wetsuit the surfer wears, seeing risks as a means of protection, preparation, and adaptability.
We're going to cover:
- What is a risk and how to “calculate” it
- How to understand the neuroscience of psychological risks & safety
- What to be aware of when it comes to risks
- Action: Apply the Walt Disney technique to a risky decision
A risk means:
- The uncertainty of undesirable outcomes for something we value
- Exposure to the possibility of something bad happening
- What introduces variability to the outcomes
- A combination of the probability of an event and its consequences
- The trade-off between gains and potential losses
How to calculate a risk
Risk Priority Number = Occurrence x Severity x Detection
Occurrence = the probability of the scenario (1-10)
Severity = the impact of the scenario (1-10)
Detection = the likelihood to identify the scenario upfront (1-10)
Work on high RPN risks first!
The neuroscience of risks & safety
- Cortisol
- Adrenaline & Noradrenaline
- Serotonin
- Dopamine
- Oxytocin
- Endorphin
Beware:
- Risk focuses on the negative consequences, but positive ones can occur.
- Your risk aversion might impact the RPN calculation.
- Always expect the unexpected.
- Responding fast doesn’t necessarily mean responding properly.
- Math doesn’t beat instinct.
Apply the Walt Disney technique to a risky decision
1. Dreamer: everything is possible, let go of your limitations.
2. Critique: find the weak points and what can go wrong.
3. Realist: what is possible & feasible, having resources in mind.
“Success is not final, failure is not fatal: it is the courage to continue that counts.” - Winston Churchill
