Some decisions come easily. It’s a gut feeling and you just know what to do. But other decisions can get us stuck forever. It took me almost two years (2006-2008) to finally decide to work for myself.
I was recently asked how I did commit to that decision and I remembered the process a good friend took me through. It is essentially a “risk management” type process which you can use to forget about long lists or worries and woes about how it will all turn out…
My decision to work for myself did not come without the usual worries : What if it doesn’t work? Will I make enough money? Is it the right time? In the summer of 2008, I was expecting my 3rd child, had bills to pay and my wife was a full-time mother. I didn’t want to get it wrong. And as we all know, fear is a wonderful way to do nothing. In fact, I had already been ruminating for nearly two years.
One day I spoke about it with my friend Kevin and he asked me a few questions that finally sealed the deal. When you are faced with worry about if you really can decide to “do that”, these might help you …
If it works ….
Kevin asked me to estimate on a scale of 1-to-1o the likelihood that it would work out. At the time, I was a learning and development manager with a great bunch of contacts of like-minded learning people and I was planning to start-up as a freelance trainer. I figured someone was bound to give me some work. I had loads of energy, felt very creative and was good at networking. And I had no doubt about my ability to deliver. I estimated a “7”.
Then he asked: “If it does work, how would you measure the impact scale of 1-to-10?” adding that I could think about happiness, money, pride … whatever I wanted. I answered immediately with a conservative 10 🙂 It was exactly what I wanted for so many reasons, I would manage myself and my time, make great money and be much happier.
What if it doesn’t work?
Kevin immediately followed up with that one. “Now estimate from 1-to-10 the negative impact if it doesn’t work out”, he said. On that day, I had 20,000 euros in a savings account, which would give me quite some buffer for not having work immediately. I figured that if I didn’t have ANY work in 6 months, I could double-down for a few more months before I’d be forced to look for another job. As a 30-year old with a pretty nice CV at that time, I thought having a “failed” 9-month attempt at entrepreneurialism wouldn’t be the end of the world. I could always spin-it nicely and surely I’d get another good job one day? Even flipping burgers would pay the bills if we cut back. I estimated the potential impact of failure at a “2”. It would only be money after-all.
And then he asked me: “And what is the likelihood of that all going wrong?” At this point, you might be asking yourself if this method is worth anything at all. Surely these estimations are not worth anymore that that? But as I said in a previous post, we all have tendencies to make up stories that are not worth much. So if you’re already lost in those stories, why not bring a little method to the madness?
So I thought about it: I have a good network, I’m creative etc etc …. I reckon its a “2” again.
When you have measured probability and impact of the reward/risk, its time to do the maths
Anyone who has even been a project or risk manager already knows what we are doing here. Its a typical method. If you want to do it better, you can ask some experts and experienced people to throw in their thoughts on probability and impact. Or you can be a dreamer like me. Either way, you can use this tool to make a decision.
The final step is to multiply the results for reward / risk.
In my case, the result for “reward” was 7 (likelihood it works) x 10 (impact if it does) = 70
The result for “risk” was 2 (likelihood it doesn’t work) x 2 (impact if it doesn’t work) = 4
… and that was that: 70 vs 4. I couldn’t help but say “OK …. I gotta do it”
Now: You can question this method all you want. But this is a tool for when you are stuck with questioning things. So if you are stuck with an important decision, try this and let me know how it goes.
Thanks for reading 🙂