Risk Aversion vs. Risk Intelligence: How to Make Smart Decisions in a Complex World
Imagine you are the president of a successful company, earning millions of dollars a year, and enjoying a comfortable and secure life. One day, you receive a phone call from a charismatic visionary who wants you to join his fledgling startup, which is trying to revolutionize the personal computer industry. He tells you that he admires your skills and experience, and that he needs you to help him make his dream a reality. He asks you one simple question: “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?”
This is the dilemma that John Sculley faced in 1983, when Steve Jobs persuaded him to leave Pepsi and become the CEO of Apple. Sculley had to choose between staying in his safe and lucrative position, or taking a huge risk and joining a risky and uncertain venture. He chose the latter, and became part of one of the most innovative and influential companies in history.
Sculley’s decision illustrates the difference between risk aversion and risk intelligence. Risk aversion is the tendency to avoid or minimize potential losses, even at the expense of potential gains. Risk intelligence is the ability to estimate probabilities accurately, weigh potential outcomes rationally, and update beliefs based on new information. Risk aversion can limit our creativity, innovation and impact, while risk intelligence can help us make smart decisions in a complex and uncertain world.
In this blog post, I will explore how to recognize and overcome risk aversion, how to develop and apply risk intelligence, and how to become an original thinker who challenges the status quo and moves the world forward. I will draw on the insights and research of Adam Grant, a leading organizational psychologist and author of the best-selling book “Originals: How Non-Conformists Move the World”. I will also share some stories and examples of people who have demonstrated risk aversion, risk intelligence and originality in various domains.
If you are interested in learning how to unleash your creativity, innovation and impact, read on. You might discover that you have more potential than you think.