KNOW YOUR RISK TOLERANCE

Risk is a tantalizing lover. On one hand, you negotiate every decision to minimize it: on the other hand, you’re seduced by ites temptation for greater gain. It’s what you measure before you begin a business, and agonize over before every decision thereafter. It is one of the most potent ingredients in your personal make-up cauldron.

Risk tolerance is very personal, as individual as personality itself. What matters is how you reconcile the risk you are prepared to accept with the actual risk required to achieve goals. It means truly understanding your tolerance threshold, then adjusting goal aggressiveness to match. Sound simple ? It’s not. Few people ever achive risk peace of mind. Yet every soul who leads a business strives to find that perfect balance.

Risk acceptance is affected very much by the people you lead. If employees are well trained and perform with excellence, leadership is more comfortable. You have more confidence to accept risk. If your followers are weak, your energies will be depleted just ensuring they meer expectations. You’ll have little enery left to manage new risk. The stronger the team contribution, the greater a leader’s tolerance for risk. The case of Laura Harding and Luxury Homes Ltd. illustrates this point.

When they graduated from university, Laura and two friends started an interior design firm. At the time, there were no designers for the expensive housing market in the city, so sales increased at a faster rate than expected.

1 Comments

  1. Avatar VICKY says:

    Sir your blogs are awesome , keep writing

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