risk and limitationsIn 1973’s Magnum Force, Dirty Harry snarls one of his more famous one-liners: “A Man Has Got to Know His Limitations.” In this case, Inspector Callahan was talking about someone’s physical capabilities. We intuitively have a sense for our limitations of capability be they physical or mental. Our natural inclination is to focus on the zones where we are strongest or most capable. We tend to avoid challenges that we perceive are near or past our limits. The same is true as it relates to financial, career or social risks. When confronted with potential risk, we work to keep it within our comfort zone which in most cases is built upon a foundation of experience in related circumstances and the mental paradigm with which we approach the world. Risk management is exactly what it says – an effort to manage perceived risks within a comfortable tolerance.

Working within comfortable tolerances is fine for those that want to maintain. To maintain is to adopt a “protect” mentality. However, to push ahead, improve, expand, grow, attain or progress in almost any way, we have to push the envelope of perceived risk and test our limits. In other words, with no risk, there is no reward. The trick then is to balance our instinct to protect our self with the audaciousness that will help us achieve what we want in life. How do we balance our tolerance for risk with pushing our limits? As an entrepreneur, my perspective is predicated on an approach to business and growth. However, I think the framework below applies equally well to other elements of life.

  • Define Your “Risk Envelope” – To “push your envelope”, you need to find its edges. One simple way to determine your limits is to consider your point of no return – the point at which failure to you is unrecoverable or untenable. If it is a financial decision, you might base it on how much of your available capital you’re willing to expose to complete loss. If it is a career move, you might consider the worst downside of a job change – it might not be what you expect or what happens if you fail to perform? In these cases, that innate fear will give you a sense of what you can or can’t tolerate.
  • Consider Your Upside – In any risk assessment, you also need to consider your upside. The potential reward will profoundly influence your willingness to push your risk envelope. It is pretty easy to quantify a financial upside. However, there are often other less obvious benefits – personal growth, knowledge, recognition. Often, the ancillary benefits to a financial success might mean more to you than the money itself. You will have to be honest with yourself because it can sometimes be difficult to admit to other motivations.
  • Assess Your Limitations – So far, the risk/reward elements have been pretty straightforward. Now it gets trickier. What are your limitations? You’ll quickly see the obvious ones: money, knowledge, time, access, resources, positioning etc. It is always easy to see the reasons that a particular path will not work. As humans, we are particularly effective at identifying our limitations. Look at them closely. Each limitation you identify has a “real” and a “perceived” element to it. For example, you’re invited to invest $100,000 in an awesome neighborhood bar concept. However, you don’t have $100,000. Or do you? Well, there is $10,000 in your savings account but you were saving that for a vacation. You also have $50,000 in an IRA but isn’t that untouchable? Maybe there is $30,000 available in your home equity line and possibly $15,000-$20,000 available on credit cards… Do any of these options make you cringe? You’ve just found the edge of your risk envelope. In this case, the money may not be your real limitation – your discomfort with debt, high interest rates or risking your retirement may be greater limitations. You can apply this exercise to any number of limitations that appear on your radar. Honesty here can be truly enlightening. There are always more possibilities than you think though they may not be as palatable as you’d like.
  • Pushing Your Limits – Ultimately, pushing your limits is about stepping outside of your comfort zone and into the unknown. We’ve all felt these moments: running hard enough to feel muscle failure, working long enough to feel the limits of our energy as fatigue sets in, signing off on a mortgage that entails a monthly payment that is more than a bit intimidating or accepting a project that is beyond anything we ever done. When it comes to pushing our limits, it is critical to recognize that they are normally self-imposed, built on historical precedents (our own experiences) and directly associated with our aversion to risk. The key to pushing past them is viewing them as a gateway to the new, the improbable and the rewarding. Just past those limits lies the new you, the unlikely win or the impossible windfall.

So now you’ve got a framework for assessing your risk tolerance, understanding the nature of your limitations and intellectually framing what needs to happen to push past your limits. Here are some ideas on how to balance your risk tolerance with a desire to push your limits:

  1. Remember that we each are very different when it comes to risk and our ability to tolerate it. Don’t look for comparisons when assessing yours.
  2. With regard to risk, you need to factor-in other people in your life. Your husband, wife, partner, children etc. all need to be considered. Risk is typically not yours alone.
  3. When assessing limitations and identifying options, it is good to make comparisons. People have been fighting the same battles for thousands of years – read other people’s stories for ideas.
  4. Even when pushing your limits, you’ve got to listen to your inner voice. Discomfort is one thing, nerve shattering anxiety is another. Just like your body tells you when you are in the danger zone physically, your mind will send similar signals at the appropriate time. You don’t want to to push your limits only to find yourself frozen in fear and anxiety at precisely the wrong time.
  5. Build to it. Pushing your limits shouldn’t be an all or nothing event. It is a progressive set of efforts you undertake to build increased risk tolerance and the necessary skills to push past incremental limitations. In this case, success is the better teacher because it builds confidence by reinforcing the good feelings associated with pushing to a higher level. Failure will only reinforce your perception of your limitations. When it comes to pushing your limits, walk before you run.
  6. With that said…you must not fear failure. Pushing your limits exposes you to failure. Moderate the risk of failure by 1) building to it and 2) planning for success. You cannot shrink from the fear but muster courage and walk into it anyway. It is simply a part of growing through life.
  7. Prepare, prepare, prepare. It is far easier to push your limits when you feel that you’ve prepared yourself to go to that next level. Training, coursework, partnering, obtaining outside counsel etc. – all efforts to prepare help build confidence that you can in fact push past your limits.

This post is by no means exhaustive but I hope it gives you a framework for approaching those limitations you come across in your life and pushing past them.

Please share additions to the list or your story of “pushing your limits”!

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