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23 Oct. 2012 | Comments (0)
You like your current position, and you're doing well, but you just got a surprisingly attractive job offer. It's exciting. Your friends say they're happy for you. You expect to accept the offer.
But hold on just a minute. Let's assume that if you take that offer, you'll shift to a new function (or a new industry), and you'll enter a very different culture. You'll be required to move halfway across the country, and there'll be more business travel.
Should you take the plunge? Should you make a big bet or play it safe?
Any new job offer is an opportunity. But with opportunity comes risk. Deciding whether to take the new role or stay where you are is a tough choice. What if it doesn't work out?
These risks are prevalent in any career decision, especially those that affect your financial security and personal life. Consider the risk in starting your own enterprise. That's what Brian, 34, did. (All names have been changed.) He left his secure and well-paying job and lived off savings to found a food company whose good-tasting but low-calorie organic products would improve diets.
Brian briefly considered starting his company on nights and weekends without giving up a regular paycheck. He could test the water before going all in. It was safe, but he felt it wouldn't work.
I had to take the full plunge. I knew I wanted investors to commit. If I wanted them to write a check, I had to do it all the way. I couldn't bring on employees if I wasn't fully committed. And if I presented my product to a retailer's buyers, they'd be making a leap of faith, too, so I needed to be fully committed for them.
Brian's big bet proved to be a wise choice. He built a successful company and sold it at an attractive price.
But big bets aren't for everyone. At 37, corporate SVP James was completing a two-year cost-reduction project that would eliminate his role in the company. He couldn't lead a new cost-driven philosophy and protect his own senior position when it no longer was needed.
James considered his options. He talked with management consultants and private equity firms — the fields where he'd worked a decade before. He talked with other companies in his industry. In the end, he decided to take a smaller role within his company.
James had three reasons for the step downward, all aligned with risk reduction. He wondered whether he'd really succeed back in the trenches with the day-to-day intensity and travel that private equity or consulting required. He wondered whether he'd work well with the people in other companies in his industry. "It's the people," he said, "knowing I stood with people who had my back."
Finally, all these jobs required a move. He'd divorced the year before, and his two young children lived in town with their mother. He wasn't sure how his relationship with his children would develop if he relocated.
James concluded, "It's safest to stay. Even if I didn't want to, I'd be better off crafting my new message from there." He deferred a big commitment and decided to take some time to reflect. Things will change. He may advance in his current company. He'll know more about his relationship with his children. At some point, he'll revisit his strategy.
There are occasions when a big bet makes sense. There are occasions when it doesn't. And whatever the occasion, people have different attitudes toward risk. If you're facing a big choice, ask three questions:
1. Does the opportunity require the commitment?
Big bets can create the mentality needed to succeed. Sink or swim situations are energizing. With high aspirations, caution may be more risky than taking the plunge. And risk takers can attract support from others.
Brian knew his prospects were greater if he went all in. He hoped to shape his future, and a full commitment was required to do that. If he'd started the company part-time, it might not have done well, and it would have taken energy away from his day job.
2. Can you accept the risk?
Both James and Brian faced failure risk and personal risk, but they reacted differently. James worried he might fail in the new positions. Staying with his company in a reduced role was safe; he'd be a VP with the associated pay and prestige. At his stage of life, he also considered his relationship with his children.
Brian knew most new ventures fail, but spent no time on that. His current job was okay, but not so good that he worried about giving it up.
3. Is there a contingency plan?
If the business didn't work out, Brian assumed he'd be able to find another good job. He'd always been able to do that. James knew he was safe for the time being, and he could reassess later, once he had a better idea of how his personal and professional lives were progressing.
Big, hard-to-change commitments can shape your environment and increase your prospects for success. But those big commitments often come with a chance of failure. Don't simply let things take their course and hope for the best. Manage that risk by evaluating the opportunity, your situation, and what you can do if things don't work out.
This blog first appeared on Harvard Business Review on 10/01/2012.