Some years back we developed an exercise that can be beneficial for every entrepreneur. We all want to manage risk – not take risk. I’ve said it before that taking risk is akin to rolling the dice. Managing risk is an intentional process to minimize or eliminate risk to the greatest extent possible. To this end we created a process called Opportunities to Fail.

Some might say that “Opportunities to Fail” sounds negative and ought to be called something else. But, it is named this way on purpose. Why? Because we believe that whether we succeed or fail is almost totally within our control. Thus, we have the opportunity to succeed or to fail – it’s up to us as entrepreneurs which we choose.

Let’s say that we are considering launching a new division, a new product or service, or embarking upon some other endeavor for which there are numerous risks. The Opportunities to Fail exercise begins with assembling all of the stakeholders from the team and beginning a series of brainstorming sessions. The first such session is that of identifying all of the different risks that are inherent surrounding whatever we are preparing to do. For this purpose we developed a simple Excel spreadsheet on which we log the risks. To each, we assign a numerical value on a scale of one to 10 – both in terms of Probability and Impact. We arbitrarily determined that we would weight Impact 25% higher. So, if a particular risk is assigned a 10 for Probability it means that there’s a high likelihood of this risk being realized. And if that same risk is also a 10 for Impact, it means that if the risk is realized, it could have a very detrimental effect. Thus, the Probability score is 10 and the Impact score is 12.5 (due to the 25% extra weighting) for a total score of 22.5.

Remember that during the first exercise we are only identifying the various risks and assigning Probability and Impact scores – we’re not solving anything yet. Usually this inventory process takes a couple of hours and there may be as many as 25, 30 or even more risks. When someone says, “An asteroid could drop out of the sky and destroy us,” it’s probably time to wrap it up. We then re-order the risks in the spreadsheet from the highest numerical value to the lowest, and circulate it to the stakeholders for a few days of contemplation. Everyone is empowered to offer additional risks during this time frame with their thoughts on scoring.

The second meeting of the group will take place within three or four days of the first, and is devoted to risk mitigation. We look at the highest scoring risks and discuss ways that we will prevent the risk from coming to fruition. In addition, wherever possible we also add a contingency plan in the event that somehow the risk “leaks through” our mitigation program. This way if a high-risk item bites us, it doesn’t kill us. We have found that there’s a natural breakpoint in the list. Perhaps there are 17 risks that rank at 14 or higher, and then there’s a gap with the next grouping of risks starting at a score of eight. We generally don’t worry too much about low-scoring risks as their Probability is usually low, and even if they happen, the Impact is minimal. Instead we spend our time ensuring that we have robust mitigation and contingency plans for the most dangerous risks.

At the end of the second meeting we ask this simple question – “Are we totally comfortable moving ahead with this endeavor?” If there is still fear and trepidation, then it means that we haven’t sufficiently mitigated one or more of the risks. Or it could mean that there is something nagging in the back of the minds of our team that still need to be put on the table. It’s at this point that we engage in additional discussion and mitigate further until we have total buy-in; we modify our endeavor to the point that everyone is comfortable, or we determine that should not move forward at all. The ultimate objective is to either move ahead knowing that we aren’t going to fail, or not to move forward at all.

A few days later a third meeting of stakeholders occurs. Each member of the group reaffirms his or her belief that we have adequately mitigated the risks and should proceed. Then we brainstorm for ways to Exploit the Opportunity. This is a lot of fun. We spend our time looking for ways that we can enhance the opportunity and make it even bigger and better than we initially envisioned – without adding new risks.

Utilizing the Opportunities to Fail exercise is a liberating experience. It puts us in a position to manage risk rather than take risk, and allows us to choose success.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 124 – Do the Hustle.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

This picture taken on October 18, 2015 shows a participant jumping off a platform for a wingsuit flight from Tianmen Mountain in Zhangjiajie, central China’s Hunan province. Some 16 participants from 12 countries are taking part in the extreme sport event. CHINA OUT AFP PHOTO / AFP / STR (Photo credit should read STR/AFP/Getty Images)