6 mindset shifts to improve your risk and failure tolerance

It seems that change and volatility are the only things that are certain when it comes to the labor market. Jobs and professions that once seemed ‘stable’ are not immune to the forces of artificial intelligence and other technological advancements. At the very least, AI is changing the nature of what jobs look like and will likely continue to do so at a fast rate. All of this can make it difficult to know what to do to foolproof your career.

Liz Tran is a leadership coach to CEOs and founders and the author of AQ: A New Kind of Intelligence for a World That’s Always Changing. After two years of conversations with founders, CEOs, and leaders, Tran found that those who are most successful and fulfilled have one thing in common—they are comfortable adapting to change and uncertainty.

This is what she calls the Agility Quotient (AQ), a type of intelligence that she believes will continue to be a key differentiator as AI and technology continue to change how we live and work. Part of increasing your AQ is improving your tolerance to risks and failure. Below are some of the habits and mindset shifts that can strengthen your resilience to both.

1. Assess your relationship with risk and failure

The first step is to identify where you’re currently at. Are you someone that’s comfortable with risks and failure, or do the thought of both make you want to throw up?

If you’re not sure, Tran has a framework that she sets out in her book. First, she says, “Bring to mind a stressful or intense situation that you’ve been in recently…and think about the way you’ve approached it.” If you find yourself avoiding the problem, distracting yourself, or telling yourself that it’s not going to be a big deal (without actually acknowledging the problem), that indicates a low level of AQ. This means that risk and failure aren’t something that you’re comfortable with.

The middle level, Tran says, is when you acknowledge the change and “you do try to improve your situation in some way.” However, you’re still fighting the situation. “There’s a sense that you’re feeling like, ‘why is this happening to me?’ What did I do to deserve this? Why do I have to deal with this? There’s a resentment and maybe even an anger about what your situation is.” This indicates that while you have some level of tolerance to risk and failure, you’re still resistant to it when it happens.

The top level is when you’ve decided to embrace whatever change comes your way, failure included. It doesn’t mean you like your circumstances, Tran says, “but it does mean that you’re seeing it as an opportunity...rather than just something you resent.” And when you have this mindset, Tran says, “not only are you setting yourself up to best tackle the change that is in front of you, but it also helps people from getting burnt out.”

2. Strive to be a ‘learn-it-all’ instead of a ‘know-it-all’

Improving your risk-taking muscle requires a change in mindset. Tran references Microsoft CEO Satya Nadella, who transformed Microsoft’s culture from being “know-it-alls” to “learn-it-alls.” IQ, Tran explains, is about being a “know-it-all,” about having the right information and knowing how to process it quickly. AI and technology have made that less important.

The new world of work where everything is changing so quickly, Tran says, “rewards people who move fast.” That means letting go of your ego and being “willing to experiment, pivot, and reinvent yourself.” It also means accepting that sometimes, those experiments can lead to public failures.

3. Find an anchor that grounds you and gives you the stability to take risks

While it might sound counterintuitive, Tran says that “agility requires stability.” She continues, “In order to feel psychologically grounded and stable enough to go out there and take risks, you actually need a cushion of comfort and security.” That anchor might be a strong relationship with family and friends, or habits and routines like healthy eating and exercise that make you feel good about yourself. It might also be a physical place that gives you a sense of peace, like your home, a park, or a place of worship.

Tran says that anyone who wants to take risks should take the time to invest and build these anchors and routines if they don’t already have them in place. “If we push ourselves too far out of our comfort zones too quickly, then that can actually lead us to impaired cognitive functioning. You actually just want to hit that sweet spot where you’re pushing yourself out of your comfort zone, but it’s not so much that you’re tipping into fight or flight.” Creating a sense of security in areas of life that are in our control, she says, gives you the freedom to take risks in areas where the outcome is uncertain.

4. Practice discomfort on a daily basis

Tran is also a believer in exposure therapy, and believes that regularly doing uncomfortable things in a low-risk environment can condition us to do the same in a high-risk environment. Tran likes to frame it as a ‘bet’ rather than a ‘risk’. A risk suggests that there’s a downside to it, whereas with a bet, you can frame it as taking action where you don’t know the outcome, while setting yourself up for the possibility of winning, she explains.

This can look like something as small as trying out a new coffee shop or reaching out to someone who’s not in your network that you’d love to meet. “You start with risks that are tolerable, ” she says, and as you build resilience to taking those risks, you become more comfortable doing things that you might have once considered “anxiety-inducing.”

5. Work on improving your ‘recovery rate’ from failure

For Tran, a practice that has served her well during periods of setbacks has been tracking “recovery rate” rather than outcomes. Say you set out to make seven “bets” during the week, and none of them worked out in the way that you wanted. If you focus on the outcome, you’re going to feel pretty bad, “even though that’s to be expected when you’re putting yourself out there for risk-taking and failure all the time.”

“What you actually want to do is to track your recovery rate,” she says. Notice how quickly you bounced back from this, and how strong, resilient, or courageous you were in the process. Hopefully, the time it takes for you to bounce back becomes shorter and shorter, and that’s a good indication that you’re strengthening your risk and failure tolerance.

6. See failure and setbacks as open doors to new opportunities

Tran continually stresses the importance of seeing AQ (and tolerance to risk and failure) as a skill to develop, no matter where your comfort level with change might currently be. If you find yourself resistant to change, for example, it’s probably because it’s something that you haven’t prioritized, or you’ve operated in an environment that doesn’t encourage it, she explains.

High achievers, for example, can often struggle with risks because they’re used to doing something that they know will reward them in the end—like a pay rise or a promotion. But if we’re optimizing for outcomes all the time, Tran says, “we’re actually missing the broader target, which is to learn and become agile enough to succeed. “No matter how smart you are, we do not know what the future is going to bring for us, especially with the way that the world is operating now.”

The key is to be open, Tran says, to new possibilities. It’s also reframing failure and risk-taking as a pathway to opportunities you didn’t know existed. This is something that Tran, whose own career has been full of pivots, has done personally.

“In my career, I have failed so spectacularly,” she says. But looking back, she realizes that the setbacks ended up creating openings to the work that she is doing now.

“What I had planned didn’t work out,” she says, “but actually, it helped open my eyes to a different path that I never would have mapped out for myself.”