One main factor with decision making is the RISK factor and the evaluation of it. Remember that we only risk what we lose for good or what we´ll suddenly lack over a longer period of time (like money). Time never returns (!)
We sense losses double as bad as we sense a win positively. In numbers it means: a win of 50 feels like we win 50 but if we lose the 50 it feels like we´ve lost 100! If we win 25, fine – we just won 25. But if we lose the 25 the next day it feels like we lost 50! Got it?
To take away the pressure of a double-worse felt lost we can prepare for potential risks as follows, by asking and answering the following questions:
- what is the best thing that can happen if I do this?
- what is the worst thing that can happen if I do this?
- what is the best thing that can happen if I don´t do this?
- what is the worst thing that can happen if I don´t do this?
This might sound “easy” but pretty often it´s not, especially when you include 3-4 alternatives. It´s a good method for setting up our fences in all 4 directions to avoid a drop off the edges once we fall.
Let´s view this with a few RISK examples:
MONEY: You plan to invest a big part of your savings in a nice down-town apartment, to rent it (it´s 1 alternative of 3)
- you manage to lease it from the first month on and the contract runs through for 20 years
- none is going to rent it for some years and you have to invest again to renew it
- you invest in something else which offers a more profitable result with a safer contract
- the money sleeps and won´t increase over time, there is no win for you at all
The good thing at this point is that we do not know how high the loss will be if we buy the apartment and won´t be able to rent it (2). But we expect the worst and probably double the amount in our mind which increases the strong feeling of a RISK!
TIME: You plan a big party for a good friend who has no idea that a surprise event is waiting for her/him and the date seems to be safe (it´s 2 of 3 alternative surprises)
- all friends are around to be there, plus the favourite place is available for the event
- your friend gets sick and can´t come or has to fly abroad from work
- your friend plans something her-/himself and is going to invite “you”
- your friend will be invited to a big surprise party by someone else and suddenly you look poor
This shows that time or the moment will be gone for good while money could be re-earned after a “dry spell” in life. This idea and alternative includes the high risk of regret if we hesitate too long or in case we don´t do it at all.
BE A DECISION MAKER. BECOME OUTSTANDING.
rita jaskolla – Leadership Architect –