The ability to take smart risks is the single defining attribute of a successful entrepreneur, but at times the primal brain’s aversion to fear can make risk-taking a difficult task.
On personality tests, entrepreneurs scored higher ratings on questions that tested for impulsive behavior. Additionally, cognitive flexibility, or the ability to switch a plan of action depending on the situation’s context, played a key role in making smart business decisions. Combined with an impulsive personality, this cognitive flexibility gives risk-takers a particular edge over people who don’t have an impulsive nature.
Our brain doesn’t like risk, especially when it involves loss. Risk can also make us anxious and inhibit our ability to think creatively and problem solve efficiently.
Fear is the strongest variable that stands in the way of success, as it inhibits your brain from taking rewarding risks. This notion of loss aversion describes why people often unconsciously choose avoiding losses over acquiring gains.
In a 2009 Scientific American Mind article on amygdala damage, Dr. De Martino explains, “Loss aversion reflects a very ancient mechanism in the brain. Think about an animal. It has to get food, but at the same time it has to protect itself from predators. It would be very wise for an animal to weigh gains and losses from an evolutionary perspective. “
It’s fairly obvious that financial well-being is necessary for survival in the modern world. Almost all entrepreneurs are forced to put their financial security into jeopardy at some point. Their trick is they don’t fear loss the way everyone else does. It’s important to remember that the anxiety and general unpleasantness associated with the thought of loss occurs in the brain, and it can’t physically harm you.
The ability to take successful risks occurs in the brain and its biggest deterrent, fear, also exists in the brain. By understanding how your primal brain makes decisions in the modern world, you can learn some simple tricks to help train your brain, silence the fear associated with loss, and make better decisions now.
Can you think of a time when your ability to take risks was rewarding? Why do you think you were able to move past the fear accompanied with taking risks? Tell us about a time took a rewarding risk and how it worked out. Share your story in the comment section below.
Monica Mehta 