We live in a global economy. Risk is unavoidable. Rather than ignoring risk, we should embrace it. The term “embrace” suggests that we welcome risk — not simply tolerate it. What is risk? When asked what risk meant to them, undergraduates’ responses ranged from extremely negative to extremely positive. The most common words associated with risk were “danger,” “loss,” “chance,” “uncertainty,” “reward” and “opportunity.” It is the last meaning I will focus on here — how can we view risk as an opportunity to improve our lives — and more importantly, the lives of those around us.
My decision scientist training leads me to borrow a few principles from statistics that focus on minimizing uncertainty.
Principle I: Admit what you don’t know
A recent and well-known example of the consequences of ignoring the unknown and not acknowledging risk is the economic crash of 2008. The economists were focused on precision rather than accuracy. Although they argued that their models could be used with 95 percent accuracy, their track record in the years leading up to the crash was closer to 60 percent. Even if they had been 95 percent accurate, their models would still be inaccurate 5 percent of the time. In addition, they had been relying on false assumptions — mainly that the chances of individuals and businesses defaulting on loans were independent (not related) to each other, that the ratings from the organizations on mortgage-backed securities were accurate and that home prices would continue to increase — as opposed to being cyclical. The consequences of these mistaken assumptions were catastrophic — defaults on mortgages spread, the housing market collapsed, bankruptcies became more common, banks failed and eventually national and global GDP and exports were impacted.
While that is a dramatic example, we are better off if we don’t ignore risk and instead learn to view risk as an opportunity. How might we do this? If we admit that we have limited knowledge and instead seek to broaden our education and expand our perspectives, we will be better prepared. Admitting that we don’t have all the answers and that learning is a life-long process is not a sign weakness, in fact, it is a sign of strength. We live in a dynamic global environment that will continue to change. Our educational system must continue to evolve and be open to dramatically different styles and forms of learning. The impact of technology and accessibility to data will continue to act as disruptors. As educators we need to continue to take initiative and be innovative.
Principle II: Understand you are unique
We all possess a different set of characteristics, skills and experiences. These combine to create a unique perspective — or lens — that we can use to view our own risks and risk factors. Our mission and perhaps challenge, is to appreciate our strengths and weaknesses. Our weaknesses can help us appreciate Principle I — and reach out to partner with others who compliment our knowledge base. Whether we are simply studying for an exam, drafting a business plan, or ready to start a new business, the value of partnerships and collaboration cannot be overestimated. Rarely can we adjust for risk on our own as well as we can with the support of others. It is when we join hands with others and function as a team that we truly appreciate the value of synergy, or as the term synergistic variables implies, reduce our risk and variability in achieving our desired outcomes, accomplishing far more than we could on our own.
I am fortunate to be surrounded by a strong, dedicated team that is solely focused on our mission of improving all curricular and co-curricular opportunities for Georgetown students. We are continuously experimenting, exploring and debating new ideas. We are entrepreneurial by training and by nature. We understand that in the ever-changing world of higher education, we cannot stand still. The financial, environmental and global pressures and trends in education are constantly moving. We collaborate with students, faculty and alumni to develop new approaches to experiential learning, social service learning and real-time learning. Within the last six years, we have worked together to launch programs in Barcelona, Hong Kong, Nicaragua and Peru. The newest of these programs represent unique collaborations with other parts of the University. We hope to expand our Global Social Internship program in Central America by finding synergies with the Beeck Center for Social Impact and Innovation and our Global Business Fellows program hopes to grow to meet new demand from the School of Foreign Service and MSB to prepare our students with a broader skillset. We continue to experiment with our one-credit internship courses, our module-type courses worth 1.5 credits and our two-credit innovative consulting course, “Global Business Experience.”
Principle III: Don’t Fall in Love With your Models (or Plans)
A famous scholar named George Box once said that statisticians and artists have something in common: we both have a habit of falling in love with our models. This is a natural human tendency. Once we have put the effort and energy into developing a complicated model of reality, we want to believe that it is reality — are resistant to update the model based on new information. Over time, we gather new data, our perspectives change and we learn from others. Therefore, we need to learn to revisit and revise our models — or in the case of our personal lives, our plans. Life paths are rarely linear. Not only is it acceptable to be flexible and adapt over time to changes in our direction, it is preferable.
From a curricular perspective, we must continuously revisit our students’ expectations, demands and needs. As the worldwide access to digital learning improves, the collaboration with global institutions increases and costs of education soar, we owe it to all of our constituencies to explore alternative models of education. Whether we refer to these new methods as distance learning, flipped classrooms, project-based learning, or experiential learning, continual revitalization of the educational experience for our students is a necessity. Our accrediting organizations expect it, our alumni expect it and our students deserve it.
Whether we refer to risk in the context of educational models — or in the context of our personal paths, we have a greater chance of improving the lives of others if we embrace risk and not simply tolerate risk.
Norean R. Sharpe is a senior associate dean and director of undergraduate programs at the McDonough School of Business.