In this post I want to speak with you about the importance of risk taking and share with you an important strategic weapon called the “Minimax Analysis.”
The “Minimax Analysis” is a strategy in decision theory concerned with minimizing the biggest possible loss while maximizing the potential gain of any given situation or risk.
How it works is a simple, yet counter-intuitive process for you to use. When you are presented with a decision to take a risk, what you do is engage in a “worst-case scenario” analysis.
There are a few steps involved…
Step 1. Identify and analyze the worst-case scenario as it relates to the risk. A good example might be starting your own business. The worst-case scenario is that you fail and lose all of your money!
Step 2. If the worst-case outcome is unacceptable, then immediately walk way as this is an unintelligent risk. This will save you a lot of time, money, and potential embarrassment. You must remember that every risk has an upside and downside scenario, and in this case of starting a business, you may have a lower tolerance for risk than others.
Step 3. If you find that the worst-case scenario is something that you can live with, then congratulations as you have quickly identified and accepted the worst-possible outcome. Now get to work on minimizing thepotential downside. One of the first things you can do is to begin your business plan and research everything associated with the starting of a business to include financial commitments and family sacrifices.
Step 4. The fourth and final step is all about maximizing the upside positive outcome. Identify all appropriate actions that can and will take to tip the scales in your favor. This is intelligent risk taking in action.
From here on out the rest is pure gravy.
Now that you are armed with this knowledge, you must remain acutely aware that the risks you’ve taken in the past define your life and reality as it is today, AND the risks you take today will define your life and reality as you would ideally like it to be tomorrow.
TOMORROW, I am going to share with you a special opportunity which contains a small risk and a MAJOR upside potential. Keep an eye out as we have worked over ten years on this project! Until then, focus on developing a tolerance along with a healthy appetite for intelligent risk taking.