Careers are developed with a lot of uncertainty. Today’s technological shifts make it even harder to predict future work life and the consequences of personal decisions in careers. However, risk-taking is inevitable and necessary if we want to realize sustainable development of careers and employability. So, how do career counsellors and their clients deal with risk in career development?
Lessons from entrepreneurship and business life
Saras Sarasvathy studied the reasoning and logic of successful entrepreneurs. Her research resulted in the effectuation approach for entrepreneurship as a way of dealing more effectively with uncertainty.
The effectuation theory describes an entrepreneurial decision-making process in which a person assesses the resources available to them to determine the next step in achieving their goals. It differs from the causation approach still taught in many business schools, which centres around predictability and planning to meet a predetermined goal.
One of the five principles of effectuation is “affordable loss.” The term loss may seem to be at odds with entrepreneurial activity, the main objectives of which are usually profit and growth. However, Sarasvathy argues that it is better to consider what you can afford to lose in a venture or project. Not focusing on possible risks that may generate uncertainty and fear, but on what is acceptable to lose, is a matter of changing your perspective.
In terms of career development, affordable loss may be an easier way for jobseekers to think about risk. For instance, a jobseeker might be prepared to lose an affordable share of their income to move to a more interesting job, but could feel overwhelmed by thinking about all the possible risks that could be attached to a job change.
Rational and emotional approaches to risk
As career counsellors, we often see that people try to calculate their risks to manage them. This rational approach is often applied in businesses life, consisting of the following steps:
- Risk identification. What is ahead of us? What kind of risks may occur in the situation we approach?
- Risk evaluation. How significant are the possible risks? What is the likelihood of their occurrence?
- Risk reduction. What can I do to avoid, moderate or bear those risks?
- Risk prevention. What can I do to prevent or compensate damage or loss?
It makes sense, doesn’t it? However, humans are not that rational in decision-making and in handling uncertainty.
Nobel laureate and psychologist Daniel Kahneman underlines the dominance of our more emotional and intuitive thinking system. Although we prefer to believe we are rational beings, much of our behaviour and choices are primarily ruled by our faster and more impulsive emotional system.
Our emotional inclinations often lead us to seek to keep what we have and avoid loss and pain. We avoid risk to seek safety, but at the same time, miss interesting opportunities and chances.
Gerd Gigerenzer, Director of the Harding Center for Risk Literacy in Berlin, Germany argues that we should have more confidence in our gut feelings and shouldn’t calculate too much. People with a high risk appetite – bungee jumpers and gamblers, for example – embody this mindset. However, as with avoiding risk altogether, doing without thinking can result in negative consequences; many businesses fail every year.
Intrapreneurship as a model
To help your clients increase their calculated risk propensity in their career decision-making, encourage them to take on the role of an intrapreneur. An intrapreneur is an employee who behaves as an entrepreneur. The intrapreneur brings creative ideas to their work, takes innovative approaches, is pro-active and is prepared to take risks.
Employees who want to develop the role of an intrapreneur need space in terms of autonomy and time, but also for professional development, for failing and mistakes and for experimentation. Achieving space is in most cases the result of a dialogue between an employee and his/her manager.
Acting out this work role confronts an employee with insecurity and risks regularly – an immersion approach, so to speak. This may help a client develop more risk propensity, enabling them to make a desired career change. The developed risk propensity may also be helpful when a client becomes unemployed by making them better prepared to face uncertainty.
A tailored approach
Jobseekers have different options for dealing with uncertainty and risk-taking. Some jobseekers will be more suited to a rational, effectual method; others more for a sensitive, intuitive style or an action-oriented approach. A mix of approaches tailored to your client is likely the best approach when facing an uncertain career path.
The following slogan summarizes my approach: Be courageous, but take care!
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