Fear of change is deeply ingrained in human behavior. We often make decisions by measuring the loss of what we have as larger than the benefits of a new career or place to live. This measurement of risk and reward is understandable but obscures the significant benefits of change.
Economist Steven Levitt asked 22,511 study participants to flip a coin when deciding on potential life changes. Participants who followed through on their coin flips were happier and more satisfied with their lives six months after the study. This research shows that with great risk comes great reward.
We can internalize the concept of “change is good” but still feel nervous about making personal or professional changes. Moving to a new place, seeking a promotion, or changing careers come with risks and rewards. It is helpful to break down risk vs. reward by understanding the constant change around us.
The Inevitability of Personal and Professional Changes
The days of working at the same company for an entire career are gone for most people. The reliability of long-term tenure has given way to frequent opportunities for growth. An understanding of why these changes happen shows how taking risks can yield excellent results in your life.
Tenure in the Workplace
The U.S. Bureau of Labor Statistics (BLS) found the average worker spent 4.1 years in their current job in January 2020. This statistic remained relatively stable over the previous 10 years. The demographic with the longest tenure - professionals aged 65 and older - had an average term of 10.3 years.
This last statistic shows that today’s professionals are more likely to take big leaps in their careers than previous generations. A worker aged 65 in their current job for 10 years has undoubtedly worked at least one other job in their career. They’ve taken a risk in shifting to a new job or career in search of a more fulfilling life.
Looking Beyond Paychecks in Explaining Career Changes
The reward element of a risk vs. reward discussion is not always centered around salaries. Indeed’s survey of 665 professionals showed the following top reasons for complete career changes:
- Unhappy in previous job or line of work (81%)
- Search for more flexible work arrangements (79%)
- Opportunities for increased income (79%)
- Lack of challenge in previous work (78%)
- Opportunities for promotions (77%)
The complex formula of risk and reward involves many inputs. Despite these complexities, 49% of respondents changed careers at least once in their lives. Indeed also found 65% of those who hadn’t changed jobs were considering similar moves.
Managing Risk and Reward with a Growth Mindset
We’ve seen that change and risk-taking are commonplace in the modern job market. You have to measure risk and reward based on your circumstances. A growth mindset rather than a fixed mindset helps you push past your fears toward beneficial changes.
You can develop a growth mindset by evaluating your potential rather than your current situation. Understood explains this mindset by saying, “Instead of thinking ‘I can’t do this,’ they think ‘I can’t do it yet.’” Applying a growth-focused viewpoint to personal and professional decisions rebalances the scales toward beneficial change.
Creating Space for Change in Your Life
Organizational behavior expert Herminia Ibarra studied how the COVID-19 pandemic impacted professionals. She found 49% of respondents considered career changes because they had the time to think without the constant pressures of work. Ibarra concluded:
“The hybrid working environments with which many organizations are currently experimenting, represent a possible new window of opportunity for many people hoping to make a career change. One in which the absence of old cues and the need to make conscious choices provides an opportunity to implement new goals and intentions.”
You don’t need a global pandemic to create the space required to embrace change. Researcher Brené Brown has discussed the need for vulnerability to achieve personal and professional success. Instead of numbing vulnerability, Brown says we need to be open to this emotion for more open discussions of the present and future.
Developing a Plan but Adapting as Necessary
The coin experiment mentioned earlier in this post is not how most people make decisions. We think about the risks and rewards of a decision, consult with family, and create a plan. This experiment points to the importance of holding lightly to your goals during significant changes.
Psychology expert Art Markman argues that initial plans for life changes need to adapt based on progress toward our goals. Mistakes and misjudgments are opportunities for growth if we don’t let them block our progress. Minor adjustments to your plan can yield good results, as Markman explains:
“Chances are, the little failures you encounter along the way may point toward other opportunities you hadn’t considered when you first made your plan.”
An ongoing evaluation of risk vs. reward also involves breaking out of your usual circles for insight and inspiration. Fellow hobbyists, neighbors, and alumni groups extend your universe of possibilities. You also exhibit the vulnerability necessary to take risks when connecting with casual acquaintances.
Risk and Reward Success Stories in the Business World
Professional success does not come without taking chances. Libby Leffler of SoFi argues that upward mobility in the workplace is no longer linear. Executives, founders, and innovators are lifelong learners who accept challenges even if they involve leaps of faith.
Accenture’s Julie Sweet was a partner at a law firm when the company asked her to become its general counsel. Sweet rose from general counsel to its chief executive officer, a path far different from her previous career. She described how she evaluated risk and reward when making a career change:
“It's about not wanting to be complacent, and wanting to continue to be challenged and learn. It's this idea of, if you can see your future, then you probably are not challenging yourself enough.”
Paul Ollinger moved from a sales position during Facebook’s early years to stand up comedy in his forties. He credits an inspirational poster at his former employer that asked, “What would you do if you weren’t afraid?” for this change. Ollinger switched careers after realizing that the risk of failure was worth doing what he loved.
Building In-Demand Skills at Aston University
A professional skill set applicable across industries and regions helps you choose change over the status quo. You’ll need a combination of technical skills and interpersonal abilities to manage risk and reward effectively. LinkedIn identified five interpersonal talents that are in demand no matter your profession:
- Emotional Intelligence
Aston University’s online degrees are designed for experienced professionals in search of new challenges. These completely virtual programs attract global faculty and students who believe in lifelong learning. You can take the next step in your career with a degree in:
- Accredited Online MBA
- Executive Doctor of Business Administration
- Masters in Business Analytics
- Masters in Business and Management
Aston University students learn how to take risks and make difficult decisions at an internationally recognized school. The Guardian named the school University of the Year 2020 based on graduate salaries and student retention. The Aston Business School ranked among the top European business schools in 2020 as decided by Financial Times. Aston was also shortlisted for Times Higher Education (THE) University of the Year 2021.
Learn more about how Aston University prepares graduates to face a changing world.