Risk

When you decide to specialize, you face uncertainty (How will the decision play out? What will happen?) and the potential for harm (What if things go badly? How bad could it be?).

Risk is the product of uncertainty and the potential for harm. You can reduce risk by reducing the amount of one or both components of risk. You can almost never completely eliminate uncertainty, though. And you can get ridiculous with the effort to reduce the potential for harm.

How we respond to risk is the product of 3 things:

  1. Our emotional comfort with uncertainty
  2. Our physical ability to withstand harm or loss
  3. Our composure in the face of volatility

Specialization often feels more risky than it actually is because when we face uncertainty, most of us assume more potential for harm than is actually present. This was a helpful heuristic when living out nasty, brutish, short lives in caves.

Nowadays, not so much.


http://thepositioningmanual.com is available now.

If you already have read enough of the book to have an opinion of it, I’d very much appreciate you leaving an honest Amazon rating and/or review.

-P

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