Risk Aversion


Whenever you run your own business or when helping another business improve and grow you need to recognise their level of risk aversion. I know as you read the last sentence your thinking thats bloody obvious but from experience it not as obvious as you would think. Let me explain... people launch businesses for many reasons from drive and passion to a sudden change in circumstances but whatever the reason there is always a second unique characteristic the individual them self. The third variable is the external player this can be friends, family, commercial coach and/or the market itself. If your 19-21 with zero commitments living with parents your likely to be prepared to take much larger risks then a 30-40 yr old with mortgage, wife, kids etc. Similarly if your riding a disruptive tech as opposed running a more established market you need your risk profile to match to ensure your businesses delivers what YOU want. Ensure your innate risk profile aligns with the risk profile of your business as this is a good indicator that you will be moving in the right direction and likely to increase your chances of success.

External factor like markets, friends and coaches can distort risk profile by suggesting or advocating a strategy that either adds of remove risks above or below your own internal risk levels. Its the type of advice that says remortgage your house and invest all the money in a shiny new e-comerce website and is based on their risk profile. If advice runs contrary to your own attitude to risk your never going to implement it well if at all the best coach calibrate and align their work to the starting profile to that currently exhibited by the business. Now I'm not saying you can't change this characteristic but you need to find the appropriate levers, tools and give it time. Business success stems from planning, implementation, review and understanding and thats why as in so many areas the best skill to have as a coach is ACTIVE listen and reflective practice.


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