1. Assess your risk-taking style. How do you determine when is the optimal time
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Question
1. Assess your risk-taking style.
How do you determine when is the optimal time to take risk?
How do you accelerate your knowledge on the risk you are about to take?
What do you gain or lose with a single decision?
When do you give up on an idea you have been pursuing?
Whom do you find to mentor you on the bigger risk-taking?
2. Know your people (including directors, shareholders, and executive leadership team).
Who’s a risk-taker, and who is risk-averse?
In general, where does each person fall on the Risk Continuum— more toward behaviors that are static on one side or chaotic on the other, or something in between? Regarding the actions of others, when do they lean toward control? When do they allow for more freedom?
What special skills and interests do your employees have? Are they hobbyists with a special skill? What are they passionate about? Which have you not utilized in the business?
Do you allow everyone the opportunity to be innovative? If so, how?
3. Know your processes.
Do you have a formal innovation process in place that includes the whole organization, such as improvisational innovation (refer to the Improvisational Innovation chapter)?
What structures are in place to encourage and reward idea development?
How do you green light ideas?
Under what circumstances might your managers kill ideas?
How do you get ideas from your less outgoing people?
How do you catalog ideas and their results?
Explanation / Answer
1.
- To understand when is the optimal time to take risk we need to evaluate certain factors related to the risk. Like the time for which we need to take th risk has to be predetermined to understand whether we will be able to take up the risk for that much of time. Another factor that should be considered is the money involved in taking the risk. If we are in a position to involve that amount in the risk how will the loss effect our financial standing. Other factors could be nature of the risk, market impact on the risk, resources available with us to handle the risk.
- to increase the knowledge on the risk we need to make an accumulative study on all the factors that are making us take the risk and that will effect the risks in future. All the factors that can make an impact on the risk at present or in future are to be considered. Depending on the nature of the risk the economical factors, social factors, biological factors, scientific factors, geographical factors are some areas where studies can be made. So determining the nature of the risk, understanding the factors that will effect it and then making a deep rooted study about the same is important.
- Single decision has its own merits and demerits. It is advantageous as it is a simple method of decision making which involves less time, research and resources. It can be taken promtly by considering few factors clearly visible to us. But it can have a bad impact on the decision making. The decision made can have more risk, it will be taken without much evaluation of the chances to fail, it will have some hidden flaws that were not considered while decision making.
- I won't want to easily give up on an idea that I am pursuing unless it has more demerits stringed to it than the merits. To bring the idea into action I will examine all the factors surrounding it that will have an impact on it. I will then calculate if the impact will be a positive one or not. If I find that the idea has more loose ends and cannot be accomplished with the available resources it will be better to give up on it than to try accomplishing and getting failed because that will cause wastage of time money and energy with no outcomes.
- To mentor me on bigger risk taking I will always need a support from a person of a higher level, experience and qualification. He will have knowledge beforehand on how the risk will put an impact and how it xan be handled with utmost efficiency. He will mentor me on risk awareness methods and risk handling processes.
2. A risk taker is the person who understands the policy that with great risks come great profits. He takes up high risks for making good money and then find out ways to deal with them.
A risk averse is a person with an opposite opinion that the risk taker. He will avoid taking high risks and not look at the opportunities connected with them but instead only find them scary and difficult to face.
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