14 lines
2.5 KiB
JSON
14 lines
2.5 KiB
JSON
{
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"HubID": "2622",
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"Date": "5/15/2023",
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"HubTags": [
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"External Platform Posts"
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],
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"Contacts": "",
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"Companies": "",
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"File": "",
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"Image": "",
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"Summary": "Everything we do involves risk - getting out of bed in the morning, commuting, starting a company, trying a new marketing campaign, hiring a new employee. You cannot do anything without there being risk involved.",
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"Notes": "<p>Everything we do involves risk - getting out of bed in the morning, commuting, starting a company, trying a new marketing campaign, hiring a new employee. You cannot do anything without there being risk involved.</p><p>We don’t avoid risk because if so, we would never get anything done. We manage risk. Here’s some simple tools I use to think about managing risk. <br /></p><p>What is risk? It is the potential that something will not work as planned.<br /></p><p>Risk is (1) a function of the probability that something unplanned will happen (2) multiplied by the severity of those effects if the risk happens. <br /></p><p>Whenever we make plans, we have to consider the probability and severity that those plans will not work out. <br /></p><p>Some simple risk rules to consider: <br /></p><p>> high risk high severity, we don’t do it;<br /></p><p>> low risk low severity, or high risk low severity, we probably do it. <br /></p><p>> Low risk high severity, maybe we do it but get insurance or manage our exposure.<br /></p><p>After considering the risk in your plan, we then make alternative plans if those risks materialize. <br /></p><p>Summary:<br /></p><p>(1) Make a plan; (2) consider the probability and severity of it not working out; (3) adjust the plan to get a better risk profile; (4) make alternative plans should the risk happen. <br /></p><p>A few other rules with respect to risk that have helped me:<br /></p><p>1. “Knowns that are actually not: It Ain’t What You Don’t Know That Gets You Into Trouble. It’s What You Know for Sure That Just Ain’t So.” Be careful taking risks on things you think you know. Always question and think the unthinkable. <br /></p><p>2. Risk increases when a situation is in a critical state. For example, after skiing 5-hours, I'm tired and in a critical state and should take fewer risks. Always look at your plans in context of critical states and adjust accordingly. <br /></p><p>3. Leverage failures into something else. Risk happens; is there a way you could salvage your effort and leverage into something else if a plan fails? <span></span><br /></p>"
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}
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