It’s a very common and popular notion that taking risks is the only way to grow. But is it always true? What if we are able to grow without taking risks? We do learn throughout our lives to eliminate failure and make informed decisions to succeed. Why then this theory ‘take risks if you want to grow?’. This is food for thought with no conclusion drawn for or against risk taking.
Risk taking involves confronting your fear and taking a leap of faith that everything will work out for the better. This doesn’t mean that every risk is a blind gamble. Understanding the complexities of the risk involved can help you take managed, calculated risks that make sense in relation to your goals. This makes sense.
Risks are necessary to make changes happen in anything you do but not always. In business there will always be decisions with potential for gain or loss, with uncertainty built in. While in theory there isn’t any point in taking risks that don’t pay off, there are hundreds of things that require risk taking to make them happen differently in different areas with different decisions for improved results.
Innovation is a big one of those. Innovation is when you look for new ways of doing things, building things or perhaps new ideas being realised as a product. This requires breaking new ground that no one has done before and so there are always risks involved.
Innovation
People and companies unwilling to take risks will become stagnant with no ability to innovate or change. In the eternally changing world we live in today, innovation is needed to lead people towards growth. It enables change and opens opportunities that were impossible to see before the change occurred. People fear making that initial decision with the doubt that it may be wrong so they need to evaluate and attempt to consider all possible options without ever making a decision. There is always more information available and it is easy to get stuck in information paralysis where you do nothing but continuously analyse the possibilities.
A leader needs to have confidence that an early decision can progress things faster, even if that decision is wrong or needs to be changed later on. The risks can still be minimised by having options, alternate paths and a reasonable level of consideration, but the decision does need to be made and a leader must be confident of it to lead others towards that path as well.
It’s not realistic to have all the information necessary to make a decision. So to beat time and have the edge, make the decision when ‘enough’ information is available.
Comfort zones are everything from an individual’s daily routine to their lifestyle, to their work environment and habits or roles in their life and job – yes it’s important to challenge your comfort zones. All of these things that are repetitive and lasting become comfortable and only the new things in life really make things change over time.
A decision made under risky circumstances can be sounder when the decision maker is circumspect and prudent. But he or she has to know which risks to pursue and which to abandon or modify. In most work-related situations, probabilities are less precise and more subjective.
They’re coloured by a person’s past experience, organisational culture, and propensity for risk taking. It’s important to understand one’s risk taking patterns, one’s perceptions rooted in personal and professional history, and the degree to which cultural injunctions encourage or deter prudent risk taking.
To what degree do employees think your organisation supports prudent risk taking? Some companies routinely question each proposal - whether from marketing, production, or engineering - by asking, “has the issue of risk been addressed?”
Some employees succeed every time and when leaders want success. But 100% success suggests that the employee doesn’t take any risks to grow the business, be creative or continually looking to change for better returns. Leaders want their team members to stick their neck out far enough to take some reasonable risks to grow.
Willingness to take risks also means the willingness to step outside your comfort zone. One who is too afraid to step outside their comfort zone is also too afraid to take the risks that are often needed as a leader. Playing safe takes you nowhere with the level of competition you encounter.
Tolerance level
If you want to support risk taking, you will have to raise your tolerance threshold for when your staff or team members may miss the mark. Instead of blaming them, ask them what they learned from their “failure” and make sure you communicate to them that you realise that falling short of expectations is inevitable from time-to-time.
When employees feel vulnerable, it’s likely to fuel their risk avoidance. Some companies institutionalise risk taking in their performance review process. Such actions assure that risk taking will be embedded in a company’s culture. Most importantly, organisations need, by word and deed, to encourage employees’ innovation, reward their creativity, and not punish occasional failure.
The question is that when you know that there is a risk and its glaring, why should you take it? Instead should it be that with all your knowledge you make decisions that are not risky? Think about it. If I sense that there is an apparent risk I would avoid it and go with a decision that I think is not risky.