Josh Peace Reviews How the Brain Plays Down Risks
Risk is a factor of every day life, especially when it comes to the world of business. The decisions we make when confronted by risk are all important, but how does our brain influence those decisions? A study by the Neuro Science Group looks at the science behind our reactions to risk. Here, Josh Peace reviews this study, and looks at how it can have an impact on our approaches to business decision making.
“By recognising the risk, we can take steps to alleviate it”, said entrepreneur Josh Peace. “By doing so we can increase our chances of avoiding the danger that it presents. This study shows, however, that our brains are hard-wired to play down the risks that we face. This can lead to risk blindness, a danger for any business.”
The study was compiled by leading academician Srini Pillay, an assistant clinical professor at the Harvard Business School. It shows that our brains simply ignore the warning signs of risk that are all around us. One of the reasons for this is that our brain prefers to look at the chances of reward rather than risk. When we start up a business, we see the potential success that could come, rather than assessing the lurking risks. This is a major contributor to so many start ups failing in their infancy. To overcome this, we should always ask what our winning is preventing us from seeing. Another fact pointed out by the study is that our brain remembers successes more than it does losses. To counter this, business people need to weigh up the losses that they have suffered honestly, and carry out regular cost analysis programs.
The third important point made by the study is that the brain wants to work on known data, rather than assessing the unknown. In this way it places a larger emphasis on the past than the future, and many people assume incorrectly that it’s too difficult to interpret what the future may bring. Thorough testing of products and services before a general launch can help show the probability of future risk.
“It’s good to take a positive and ambitious approach when it comes to business”, said Josh Peace. “But we can’t let that obscure the risks that are a very real part of being an entrepreneur. By taking a more pro-active approach and looking for risks, we can ensure that our businesses are robust enough to withstand them.”
As a successful businessman himself, as well as a renowned public speaker, Josh Peace can help companies understand and then overcome the risks that they face.
