By Michael Clayton, President/CEO
Risk Taking Without Falling On Your Face
Sir Hugh Walpole said, "Don't play for safety. It's the most dangerous game in the world." The desire for a safe, worry-free environment stands in the way of every great endeavor. But the truth is that as a leader you have to take risks to achieve success. As the saying goes: "There are no short cuts to any place worth going."
Generally speaking, there are three types of people where risk is concerned. The first group is what has been called "reluctant risk-takers." They tend to do a lot of belly-aching. Their reaction to taking a risk is always, "It won't work. Here's what will go wrong..." They are always looking at the down-side.
The second group is what some call "unrealistic risk-takers." They have consistently great attitudes about risk and that's good. However, they seldom think about what could go wrong. In fact, sometimes they're so optimistic they don't see the potential dangers that a risk involves. And that's bad. A leader should never take a risk without weighing the impact it will have on himself, his people, and his organization.
To be effective at taking risks, it takes more than just an optimistic outlook. Mature leaders are able to look at a situation from both the positive and negative sides, weigh the evidence, then move forward. That's why the third group is called "ready risk-takers."
A good leader knows that although you can't alleviate all uncertainty in taking risks, there are a few things you can do to ensure that your decision to move won't leave you or your organization in ruins. Embrace the following guidelines before taking a risk:
1. Gather Information Wisely -- Paul Shultheis said, "Until you know the worst that could possibly happen and the best that could possibly happen... your equation is incomplete." Make sure that you have looked at a potential risk from every angle before you move forward.
Ask: Who will it effect? What will the impact be on your organization if you don't succeed? What will happen if you back away from the risk? Make a point to meet with your key people to determine the answers. Do your best to understand all sides of the risk, but remember that you will probably never "feel" like you have enough information. Don't let that keep you from moving forward if the information you have indicates that the risk is the right move.
2. Prepare Thoroughly -- Many leaders try to read the writing on the wall and move forward on instinct. But moving forward on intuition alone is usually unwise without a plan. Richard Sloma said, "Only rarely are business failures or poor decisions the result of too much planning; almost universally they can be traced to ego, the temptation to say, 'I don't need a plan; I'm sure I can handle whatever develops.'"
If you believe you or your organization should move in a certain direction, take the extra time to develop a game thorough plan before taking your first step -- it will be the most important time you spend.
3. Be Flexible -- Bill Cosby said, "Nothing fits in a pigeon hole but a pigeon." Conditions often change. If you're determined to stick with your original plan no matter what happens, you're not gutsy, you're naive. No matter how thorough you were during the information-gathering phase, you will still be surprised by something once you put your plan into effect. Make sure that no matter what plan of action you take, you leave room for adjustments along the way.
4. Be Sensitive to Timing -- The president of Conoco, Constantine Nicandros, said, "The competitive marketplace is strewn with good ideas whose time came and went because inadequate attention was given to moving rapidly and hitting an open window of opportunity. The same marketplace is strewn with broken glass from windows of opportunities hit after they were slammed shut."
In risk-taking, when to move is just as important as what to do. Make sure it's the best time before you move forward.
5. Maintain the Right Perspective -- There is more risk in inaction or repetitive action in the long run than there is innovation and initiative in the short run. Helen Keller said, "Security is mostly a superstition. It does not exist in nature, nor do the children of man
as a whole experience it. Avoiding danger is no safer in the long run than outright exposure." If you want to make positive progress you have to take risks. William Duver said, "There is no such thing as zero risk." In other words, you're going to take risks no matter what. You decide whether you will take the risks that come with moving forward, backward, or not at all.
Former Citicorp Chairman, Walter Wriston, wisely noted, "All life is the management of risk, not it's elimination." The notion that there is security in not ever taking risks is false. In your life and in the life of your organization, taking risks is not only necessary to achieve worthwhile success, it's unavoidable. You risk losing more by inaction than you do by actively pursuing your dreams. No great achiever has ever "happened" upon success. Make the decision today to start taking risks, and start taking them the right way.
