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5 Simple Steps to Turn Risks into Rewards

Last Updated Aug 5, 2011 8:32 AM EDT

As we hurtled towards the 33-degree banked turn at 170 mph I realized there are really only two types of people.

One type chatters away over the headset about how awesome lunch was even though the place was too hoity-toity for his taste and how fancy bread is always hard and hey "vegetarian" doesn't always have to mean 'tastes like what the farmer couldn't sell.'" The other type clutches the straps of his carbon fiber seat and vows to never look askance at anyone who depends on Depend Undergarments.

So the next day I was surprised when I took him around a road course on the back of a motorcycle to show him the racing lines I would use. He squirmed and flinched and squeezed my waist so hard I actually had bruises. What to me was a fairly pedestrian pace left him rattled.

Speed didn't scare him. He's gone a lot faster. Speed, the day before, didn't scare me. I've gone faster too. What scared us both was our lack of control and our relative fears of the unknown -- which, if you think about it, is a pretty accurate way to define risk.

Many people hesitate to start a business, change careers, or simply try something new because the risk seems too great. That's unfortunate because safe usually means sorry -- if nothing else, sorry you never gave yourself the opportunity to achieve something big.

Turning risk into reward does not mean closing your eyes and taking a leap, though. Bravery (or stupidity) has nothing to do with it. Take steps to heighten your sense of control, and reduce the "unknowns" that cause you to be afraid, and risk is no longer even a consideration. When you are in control and unafraid you don't have to take risks. You get to make decisions instead.

Here's the process:

1. Play worst first. I know it's a cliche, but always start with, "What's the worst that could happen?" Most of our fears are groundless. Sure, I could have been hurt. But probably not. I was in a car with one of the top (he says the top) racing drivers in the world. Where injury is concerned the odds of me tripping over the office dog and breaking my neck are probably worse.

Say you leave your job and start a restaurant. What's the worst that can happen? Your family could wind up homeless, destitute, and scattered? Not likely. You'll work hard and adapt and adjust and if necessary close the restaurant and get another job before you let that happen. Failing is not an ideal outcome, but it is a manageable outcome. (Besides, since the shelf life of the average executive is a handful of years, you'll probably lose your job soon anyway so what are you really risking?) Decide the most likely "worst" things that can happen and create a plan to deal with those outcomes before you start your new venture. Then you gain even more control and face even fewer unknowns.

2. Start really small. Think the odds of creating a menu, finding a location, hiring and managing staff -- all the stuff involved in running a successful restaurant -- seem like too much of a risk to take on? No problem. Create a few dishes and try them out on friends. Get a part-time job as a server, a cook, or a host. Follow around a friend who runs her own business so you can learn what owners do behind the scenes. Each learning experience eliminates another unknown and builds greater confidence. (For a guide to overcoming fear while building a complex skill set, check out my post How to Never Choke Again.)

3. Take a small plunge. Eventually practice is not enough to make perfect. Still, you don't need to go all in -- in fact you shouldn't. Taking a small plunge is not only safer in terms of risk, it helps you avoid entering the freak-out, brain freeze, oh-my-gosh-what-have-I-done snap decision zone. Cater a small event. Cater a picnic. Provide food for a fundraiser. Do it at cost. What's the worst that can happen? The event will be a disaster. Fine. You'll still learn something... and what harm was really done?

4. Then get a friend. While by now you'll feel ready -- and you will be -- you can take one more step to reduce any lingering fears: Get some backup. Ask a friend to participate. Reel in a relative. Finding a willing helper is easy; everyone wants to try new things. You get a sounding board, an extra pair of hands if a "worst" does pop up, and most importantly the reassurance of knowing you are not alone.

5. Decide. Can you do it? Should you do it? Do you have the skills and willingness and motivation? By this stage you will know.

By the way: Notice Step 5 is not "Take the plunge." That's because now you don't face a fear. You don't take a risk. You just make a decision -- an intelligent, clear-eyed, no-fear decision.

You turn what was unknown into business as usual -- Depend Undergarments not required.

Related: Thumbnail courtesy flickr user No Lands Too Foreign; flickr photo courtesy Hans J E, CC 2.0
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    Jeff Haden learned much of what he knows about business from managing a 250-employee book manufacturing plant. Everything else he picked up from ghostwriting books for some of the smartest CEOs and leaders in business. He has written more than 30 non-fiction books, including four Business and Investing titles that reached #1 on Amazon's bestseller list. Follow him on Twitter at @Jeff_Haden.