What’s (Bad) Luck Got to do With It: Is Risk the Enemy?

Today is Friday the 13^th! Not that I have paraskevidekatriaphobia, but a lot of people do – so much so that they are convinced something bad is going to happen today, just because it is the 13^th and it happens to be Friday. The risk is just too great to undertake on this day – risk (or bad luck) is the enemy of everyone today.

But the fact is, every activity undertaken, decision made, or decisions avoided individually, communally, or in a business setting involves some level of risk, regardless of what day it is. Driving to work, talking with clients, asking a girl for a date, flying, investing in stocks, buying or starting a business, hiring a new employee, buying a home, etc. all involve some level of risk. Regardless of its effect (minor inconveniences versus major or catastrophic loss), risk cannot be avoided. But is risk our enemy?

Risk is unavoidable; because it is unavoidable risk cannot be our enemy. How can any person or entity be completely surrounded by the enemy and experience growth and success? They can’t, so risk cannot be the enemy. Further, risk is NOT our enemy because of risk’s irony.

Risk’s irony is: Without risk there is NO reward; and often, the higher the risk, the greater the reward.Risk is necessary for any individual or society to innovate and prosper. Risk is required if life, people, and society are to progress.

Nobody takes a risk or enjoins a risky venture with the expectation that his efforts will fail, fall apart, or be detrimental to himself or others. In fact, the opposite is true; individuals and businesses undertake calculated risks intending to improve their place in the world and help society in the process. As Myron Steves said in his final video, “Now go take a risk.”

So what is the enemy if it’s not risk? What should be feared more than the ubiquity of risk or the possibility of “bad luck?”

Ignorance about and/or apathy towards risk are the real enemies. They work individually or in unison to obstruct an individual’s or organization’s proper management of existing risks, whether the individual or entity wants to admit the risks exist or wants to manage them or not.

Sun Tzu in his treatise The Art of War declared, “If you know your enemy and you know yourself, you need not fear the result of a hundred battles.” This means that if the person or entity knows themselves – their strengths, weaknesses, and threats (risks) – and their enemy – their ignorance or apathy about risk – they will win every battle against risk, either by effective control or efficient financing.

Managing Risk is like preparing for and engaging in battle. To win the battle over risk (or “bad luck”), individuals and organizations must know whether risk ignorance or risk apathy is their personal or corporate enemy. If the person or entity is unwilling or unable to uncover their enemy, every battle with risk will be ultimately lost. (“I’d rather be lucky than good” applies only in golf – not in life or business.)

Apathy towards risk is not an enemy that can be managed; nor can this enemy be defeated. Beware of the apathetic and don’t partner with them in any manner. Any person or business not concerned with knowing and understanding the risks involved is dangerous. Failure, financial loss, and possibly even total ruin, are inevitable.

Ignorance about risk is an enemy that can be overcome – with effort. Defeating the enemy of ignorance requires education and training to discover: 1) what risk is, 2) what is at risk, and 3) the ultimate effect of the risk being considered. Desire is all that is required to overcome the enemy of ignorance. Where there is desire, there is no apathy. Individuals and entities must desire to honestly and logically study the activity (or inactivity) creating risk, its potential consequences, and how to manage those potentials. Ignorance is not fatal as long as it is temporary.

There is no “luck” (good or bad) there is only risk (recognized or unrecognized). Of itself, today is no “riskier” than any other day; it contains the same risks as yesterday and tomorrow – the difference is how you choose to respond to the ever-present risks. Many may be less ignorant of or apathetic towards the risks they face today and every day, so they view Friday the 13^th as unlucky or even dangerous.

Fear of Friday the 13^th is fear over a bunch of nothing (sort of like living your life based on your horoscope.) Embrace the risks you face today and every day; recognize them, manage them, and use them to your advantage to propel yourself forward.

So, Happy Friday the 13^th!!

Some of this article is taken from Chapter 1 of “Insurance, Risk & Risk Management.”