So far in this column we have talked about the necessity of taking risks to function in the modern world, the fact that we are socialised to see risk negatively and what we can do to move past that bias.
Now you are going to have an opportunity to determine your personal risk profile. If you are at all curious about risk and risk taking, you likely wonder about how your risk inclination compares to others. This is your opportunity to empirically determine your risk quotient – (RQ) and learn how it compares to others.
In my books, The Power of Risk and The First‑Time Manager, I present a risk assessment tool that was completed by hundreds of people as a part of the research done for both titles. To determine your RQ, simply rate yourself on a scale of one to ten (with one being very risk averse and ten being very risk inclined) in the following areas of risk. Please note that your ratings do not need to be whole numbers – 4.6 or 5.7 are fine, as are four and six.
Physical Risks
Activities that involve some risk of injury. Riding a motorcycle, river rafting, rock climbing or skydiving are some examples.
Career Risks
Risks such as job changes, taking on new responsibilities or seeking promotions.
Financial Risks
Your risk tolerance in investing, borrowing and lending money.
Social Risks
Risks like introducing yourself to someone you don’t know or putting yourself in an unfamiliar social situation, even at the risk of possible embarrassment.
Intellectual Risks
Things like your willingness to study a difficult topic, pursue information that challenges your convictions or read an intellectually challenging book.
Creative Risks
Risks such as painting, drawing, taking on a writing challenge or pursuing an unconventional design.
Relationship Risks
Risks such as a willingness to pursue a new relationship, spend time with someone despite an uncertain outcome or make a new relationship commitment.
Emotional Risks
Willingness to be emotionally vulnerable.
Spiritual Risks
Willingness to place your trust in concepts that may be unprovable or that you do not fully understand.
Now total your ratings for the nine different types of risk and divide that total by nine to get your RQ.
You now have your RQ but no real sense of what it means.
My research shows that the average RQ of the people who completed the risk profile is 6.5. For men it is a bit higher at 6.7. The average for women is 6.3. Comparing your RQ to these results gives you a sense of how your risk inclination compares to others.
Keep in mind that there is no ideal RQ. Higher is not necessarily better. People with lower RQs make an important contribution by being generally more cautious and discerning. Higher RQ people contribute by being more action-oriented. Both traits are valuable.
Your new awareness will help you in working with your colleagues. Keep a person’s risk inclination in mind when assessing how best to communicate with or persuade them.
Remember, you do not know the specific RQ of any person. While you probably have a general idea, making an absolute assumption can be dangerous. A few probing questions can help you clarify your assessment. Something such as, ‘What information is going to be most important to you when I present you with an idea? I don’t have anything specific in mind. I just want to be prepared with something comes along’.
There is nothing deceptive in your question. You are just trying to better understand your colleague so you can work more effectively with them.
Keeping your risk inclination in mind and how it compares to the people you work with will enable you to expand your awareness. Just like you adapt your methods based on a person’s intelligence and emotional maturity, you can now do the same based on their comfort with risk. You likely do this already to some degree. Your increased awareness will help you do it more intentionally.
Have fun with your expanded knowledge of your risk inclination. It is another element that can help you be more effective.
