I preferred to avoid risks, especially big ones, until I saw this short video by Jeff Bezos. In less than four minutes he changed my perspective on how to take risks and have more confidence in your decisions.
He describes the framework he uses to deal with risk-taking and gives examples of how you can apply this approach to your life.
[Video] Jeff Bezos & Risks Assessment
How to use the Regret Minimization Framework?
Like most great things, it’s very simple. If you have trouble making a decision, for example, leaving a high paid job with all the nice perks to start up a business, then you can use this framework.
After all, this is the way he justified his decision to himself when starting Amazon.
We’ll come back to justification later on but, for now, keep it in mind.
Regret Minimization Framework
To reduce the fear you have of taking a risk, try this:
- Imagine you are now at the end of your life, about 80.
- You look back on all you have done and all you have NOT done.
- You regret certain things you did, for example, hurting others and causing them pain.
- BUT you deeply regret NOT doing things when you had the time, energy, and opportunity to do so.
As we age, it’s what we COULD have done but did not that hurts the most. Other things we accept as they were part of growing up, maturing or things beyond our control.
Think about this…
Ask yourself, at the end of my life, would I regret not taking the chance to setup the business (when you really felt it would work)?
Chances are you’d regret it deeply. You won’t regret that you didn’t make enough money, or had a bigger car, or wore fancy clothes but you would regret not doing what you felt was part of your calling.
Others might call this your destiny, vocation, fate, talent… it doesn’t matter what you label it as. It was something you felt you could achieve and you let the opportunity go. That will hurt if you don’t take it.
Bezos assessed his life and decided that he could forgive himself for many things but this business (Amazon.com) had to happen. He didn’t want to meet himself later in life and have to justify his (lack of) decision.
Taking a long-term view allows us to stop thinking about the mundane daily worries that clog our thinking.
By reviewing our lives from a future place (eg as an 80 year old looking looking backwards), we’re removed from the little things that distract us.
The other side of this is how we justify this decision to ourselves.
How We Justify Things
Another way of looking at this is how we justify our decisions.
Look at how you justify things you buy.
I often disguise my true motives with loftier aims. For example, I bought an iPad because I wanted to be in the loop. Like a small child, everyone else had one, so I wanted one.
The justification was… this is an education tool/I can learn how to monetize my business with this/my kids will learn things with it.
When I go on expensive holidays, I can justify it be pointing to all the hard work I put in over the year. But, at the back of my mind, I simply feel that I deserved it. Explaining that to other can be tricky, awkward, and embarrassing depending on who you’re talking to.
Emotions often drive our decisions: we use logical arguments to justify the outcomes.
We can reduce our fear of Risks if we fast forward to the end of our days and revise these decisions. From that place, what seems like a risk to us now, appears almost irrelevant.
Why would you not take the risk?
I would urge you to watch the video and see if you agree with what Mr Bezos has to say. His arguments are very compelling.
Let me know what you think.