A global pandemic, widespread remote working, banks failing, and now major layoffs across the tech industry. The past few years have been anything but predictable.
I know this topic might seem strange because, of course, there are risks involved with taking risks. As young professionals entering into our careers during a turbulent time of layoffs, job offer rescindment, and start dates being pushed back, it’s important to start thinking through all the outcomes of career decisions and the associated risks.
When I started my career, I thought taking risks was just part of being ambitious. You should rock the boat, challenge the status quo, and be a disruptor if you want to climb the ladder, right? As I’ve grown in my career and taken on more responsibilities in my personal life, I’ve learned that the ability to take risks is a privilege I didn’t realize I had when I was fresh out of undergrad.
I’m not saying that we should stop challenging the status quo, but instead I want to discuss how to understand the weight of risks.
Step 1: Define Risks and Potential Outcomes
To start assessing the risk of taking risks, you need to first understand what differentiates risks from normal decisions. In reality, everything could be considered a risk, but the major differentiator is the probability of failure.
Risks come in different shapes and sizes, but they are all actions that have a higher probability of a negative career outcome based on your decision or indecision.
Examples could be switching into a new industry or to a startup, speaking up on a topic when you disagree with someone more senior, or navigating office politics while making decisions.
The outcome of the risks could be anything from negatively impacting relationships at work, stunting career trajectory, or even getting let go from your job. When you define risks and potential outcomes, you can move onto step two.
Step 2: Understand Your Safety Net
Understanding your safety net is an important step in understanding the costs associated with taking risks. To do this, you need to start thinking about the minimum amount of income you need to survive. This number will vary depending on what “survive” means.
You should ask yourself:
- Do you have a family to support?
- Can you move back in with your parents if you lose your job?
- Is your partner in a stable industry?
- Can you get out of a lease if you need to?
- What monthly payments are you required to make?
These are all questions that will help you understand your safety net, and calculate the minimum amount of income needed to survive. Once you understand your safety net, you can start weighing the pros and cons of taking a risk and planning for scenarios where the risk backfires.
Step 3: Understand the Probability of Failure
This is probably the least fun step, but to be successful when taking risks, you need to do your due diligence to understand the probability of failure.
For example, if you are making a career move to a new company, have you exhausted all resources to understand the current climate of the organization? Reach out to employees on LinkedIn to understand more about the team and organization, review their financial information if it is public, and google them to see if they’ve had any recent scandals in the news.
Each risk will have its own requirements for evaluating the probability of failure, but if you take the time to do this, you are able to make smart decisions that increase your probability of success.
Step 4: Find the Right Risks for You
Back to what I said at the beginning — avoiding risks isn’t the answer. It is all about understanding the costs associated with those risks and using that data to make smarter decisions.
For example, if you built up a three- to six-month safety net and have a partner in a stable position, it could be time to try out an early stage start up. This decision has a high risk, but potentially a very high reward. This is a risk you may want to take because you have the counterbalance of financial stability.
By thinking through the above steps, you also build out a plan of action for if you fail and have no regrets if something doesn’t turn out as planned.
The next few years are sure to be filled with more and more uncertainty. We don’t want to be afraid of making big moves in our career, but especially during these uncertain times, we need to be weighing the risk of taking risks.
Define risks and think through the potential outcomes, assess your safety net, calculate the probability of failure, and find the right risks for you. By following these steps, you’ll be able to make smart career decisions and have no regrets if something doesn’t turn out as planned.