Tag Archives: risk taking

Foolish or appropriate?

teeter-totterI rode my first teeter-totter last week on my mountain bike. To me it felt like a well thought out and reasonable action to take. I have been practicing my “skinny” skills and my bike handling has improved over the past year. I have watched my brother ride teeter-totters and he has shared with me information on technique so I felt well prepared. Was I afraid? Yes! Was it scary? Yes! Was it a risk? Yes! (Did I make it? Yes!)

We all assess and take different types of risk. Leaders are asked to take “appropriate” risks and then make decisions. Your success depends on your ability to accurately understand, assess, judge and take risks.

Dylan Evans, a researcher on risk and author of Risk Intelligence, believes that we can develop our skills in this area and actually build our “risk quotient.” The starting point for increasing our risk intelligence is the ability to accurately understand and accept what we do know and what we don’t know. Research has shown that most of us are bad at estimating probabilities based on what is actually know or not known. We end up either overconfident or excessively uncertain, both of which lead to poor risk assessment and decisions.

Leaders can use the following checklist that Evans developed to better understand and improve their risk intelligence.

  1. Do you consciously review what you know before making a decision?
  2. How does what you know actually relate to the decision?
  3. How likely is each piece of information to be true and how does that likelihood influence your decision?
  4. What else do you know that might actually relate to the decision?

Purposely and consciously asking these questions and using the results will increase your ability to assess risks and then make better decisions about an uncertain future.

Good luck on your next teeter-tooter of leadership!

Todd Thorsgaard

 

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Risks and leadership

riskOne way and another, risk-taking has been on my mind a lot recently. As we’re looking at building organizational capacity, part of the definition is “engaging and supporting appropriate risk-taking.” Here are a couple examples of what that might mean for day-to-day leadership.

From a project management perspective, leaders need to identify potential risks, decide how likely they are and how much impact they’d have, and then decide what to do about them. Avoiding all risks isn’t practical, or even possible. Appropriate risk taking means deciding on the right approach:

  • Avoid – take intentional action to ensure the situation does not occur
  • Transfer – hire someone else to manage the risk (for example, ask a third party vendor to complete the project)
  • Accept – acknowledge there is nothing to be done and deal with the situation if it occurs
  • Mitigate – take steps to minimize the likelihood and/or severity of the situation

Another way to look at risk-taking is part of the hiring process. The human tendency toward a zero-risk bias means that leaders might not be willing to take an appropriate risk on a candidate who could bring new viewpoints, background and perspectives to the role. There can be a tendency to look for a candidate who is similar to the previous successful incumbent, or to others on the work team.

Where have you encountered risk-taking in your leadership, and how did you decide what was appropriate?

Dee Anne Bonebright

 

 

Nurturing innovation

risk taking“If you’re not making mistakes, you’re not taking risks, and that means you’re not going anywhere. The key is to make mistakes faster than the competition, so you have more chances to learn and win.” –John W. Holt, Jr., author of Celebrate Your Mistakes

A key to leading innovation is to encourage risk-taking among your team. Yet, in a study I reviewed from Blessing White, they found that at least half of all leaders struggle to effectively drive innovation and encourage risk-taking. They also found that even the most skilled leaders and the most talented employees are often held back by an organization’s culture that rewards short-term results, punishes failure, impedes collaboration, and rejects change. Even more disconcerting, in telephone surveys of 1,190 US and UK employees, only 26% said that they are often and regularly encouraged by their manager to look for new solutions or to take risks. Does any of this sound familiar to you?  Have you felt like you and your team have been stymied by competing priorities, fear of failure, lack of collaboration, or resistance to change?

If so, as a leader, what can you do to nurture innovation?

Here are a few ideas gleaned by leadership experts and researchers at BlessingWhite:

  • Align your team. Communicate a clear purpose that supports your organization’s mission, strategy, and priorities over and over, so that you avoid irrelevant creativity. Then encourage your team find better ways of doing their jobs.
  • Inspire action. Be a role model and take risks. If you fail, openly share your story and lessons learned and your team will be more likely to follow your lead.
  • Coach the right behaviors. Encourage and vet ideas. Help employees prioritize. Recognize and reward success, by regularly acknowledging small successes.
  • Trust and build trust. Extend trust to your employees to take the right risks. Listen to your employees ideas with openness. And turn failures into lessons learned.

If your part of the organization clings to status quo or punishes risk taking, it will require an extra dose of courage on your part to lead innovatively. Even so, I encourage you to start small by removing obstacles for your employees, discussing and resolving silo or turf conflicts, and building off of incremental successes.

What is your greatest challenge in leading innovation and encouraging risk-taking? And what strategies have you used to support innovation and risk-taking?

Anita Rios