The Smart Risk-Taker’s Guide

How to weigh career, business, and other risks without regret

June 24, 2025

Learning how to take smart risks is another highly valued skill to build early on in your career. It’s not easy. The advice to “take more risks” can be confusing or even misleading, and you might hear this advice from someone who doesn’t really take any risk themselves. It’s a tightrope – you have to think about what kinds of risks are worth taking, when to consider taking a risk and what happens if it doesn’t go your way.

There’s a lot to think about here, so we’ll cover:

The types of professional risk
When and how to take smart risks
The risk that’s always Off the Table
Why failure is a learning tool

For an example of risk-taking in action, let’s look at Harry’s story.

Harry was an up-and-coming marketing manager on my team. He was in charge of segment marketing for a growth brand, but the brand had recently stalled. Harry was studying the market research and working with the account teams to look for a solution. Their collaboration led to an interesting customer insight: a previously ignored customer segment, retail pharmacy chains, had the potential to serve as an important channel for our product. It was not a proven segment for us to target, and it would require us to shift some of our budget to a new campaign.

Our leadership was skeptical of the idea, but at the same time they were growing impatient with our recent performance. There was upside: a potential new segment to reach our ultimate consumers, opening a new long-term revenue stream. The downside? Spending our marketing resources on an untested customer segment that was totally new. Harry understood that if his idea failed, it would ultimately reflect poorly on him.

Harry didn’t push his idea blindly. He used his analytical mindset to make a case with data, outlined a plan with a pilot phase, and provided milestone metrics for interim assessments. The early phases of his plan did require marketing budget, but it was reasonable considering the initial testing phase. Harry took clear ownership of the plan and its execution and monitored the progress carefully. The risk ultimately paid off, and early results from the pilot were encouraging enough to ramp up the project. Harry was recognized for having the courage to bring a new idea forward and for having the right approach for a measured roll-out. He demonstrated smart risk-taking.

Types of Professional Risk

There are many types of risks you may encounter in your professional life:

1. Career Risk

Switching industries, leaving a manageable job for a new opportunity, or launching into a new stretch project are examples that can put you outside of your comfort zone. These decisions may push your boundaries – but often in a positive way.

2. Relationship Risk

Setting a boundary, aligning with a controversial point of view, or challenging a more senior person – all of these relationship factors can create friction, but may also strengthen trust and alignment.

3. Business Risk

Examples include proposing a bold new idea, making a decision with incomplete information, or creating a new process to advance your work. These risks can test your business acumen, strategic thinking and courage – but they also can strengthen your leadership.

4. Financial Risk

Investing your professional development, accepting a lower-paying job for longer-term potential or reallocating budget to an unproven idea are all financial risks that require careful analysis.

5. Ethical Risk

AVOID this type of risk at all times. There is never a time to think about cutting corners ethically. Ethical risks include lying (even small lies), manipulating, stealing, or undermining colleagues. Don’t comprise your core values and risk eroding trust and your reputation. The damage to your career could be irreparable, and you may never recover. Always protect your integrity – that’s not negotiable.

When to Take a Risk

With all types of risks, there are going to be upsides and downsides. Learning how to weigh these in your specific situation will require some clear analysis. Here’s a framework to use – your RUDR (Reason, Upside, Downside, Regret) to help you navigate:

Reason

You’ve got to know your “why.” What is your motivation for considering taking this risk? Is it a real opportunity for you? For your team? For your company? Think hard about your intention and how constructive and productive it is.

Upside

What good will come of a positive outcome? Does it impact you directly? How does it help you with your objectives and the goals of your team and company? Consider what even a partial win would bring.

Downside

What’s the worst possible outcome? What are the cost implications? What is the impact to your trust and reputation with your leadership? There are likely to be both upsides and downsides to an outcome – think about the most likely scenario and weigh both the positives and negatives.

Regret

Look down the road 3-5 years from now. How do you think you’ll feel if you don’t take the risk? Do you think you’ll regret not doing it more that you you’ll regret trying and failing?

After taking yourself through the RUDR framework, you’ll have a better idea if this situation warrants taking the risk. You may also notice something in the list of upsides or downsides that can help mitigate the risk and reduce your chance of failing.

What If It Fails?

Despite even the most thorough analysis and careful consideration, there is still a chance that it could fail. That is, after all, why it called a risk. Not every risk works out to produce the positive results you imagine. But failure isn’t the end – it’s one outcome of risk-taking.

If you decide to move forward and take the risk, but the outcome is not what you anticipated, it’s time to reassess. Go back to your RUDR framework. If you made some assumptions about the potential upsides and potential downsides, where did you go wrong? Were there assumptions you made that were not supported by data? Did you rely on uninformed advice? Did you make a gut call that just didn’t pan out?

These answers will set you up for a potentially better outcome next time, and you may develop a better gauge on your own appetite to take risk. These experiences will help you develop stronger professional and leadership skills.

Call to Action: Becoming a Smart Risk-Taker

Smart risk-taking is not about being fearless and acting on your first instinct. It’s about being thoughtful and intentional, and applying a framework for understanding your situation and learning from your decisions. Here’s a quick-reference checklist:

Align the risk with your goals and values
Consider the type of risk in front of you
Apply the RUDR (Reason, Upside, Downside, Regret) framework
Never compromise your ethics
Use any failures to learn – and come out the other end stronger

If you’re facing a potentially risky choice right now, look at it clearly, evaluate the trade-offs, and if your analysis guides you to it – take that step forward!