People have different relationships with risk, but most businesses would be better off if they freed staff from the fear of failure and encouraged experimentation.
Most great businesses were set up by people who were prepared to take risks. Any founder tends to be a risk-taker – someone with a compelling vision who is prepared to fail in pursuit of achieving that vision.
A lot of the brands that make up the business that I am in were set up by such people. So, it is interesting that as businesses grow there can be a feeling that the founding mentality of risk-taking dissipates.
What causes this feeling? Maybe it is the word ‘risk’, and what it means to people and organisations, that causes issues. But it is a word that is liberally sprinkled around.
The dictionary definition doesn’t exactly elevate the soul: “The possibility of suffering harm or loss; danger.”
One of the questions that is often asked in management surveys is: ‘What is your relationship to risk?’ An interesting answer could be that you take a deliberately and consciously polar view towards it.
Why? Because on the one hand well run businesses have a correct and proactive agenda to manage it by understanding the threats they could face and creating risk management plans, therefore ensuring there is a culture of compliance and governance.
On the other hand, successful businesses and leaders talk about how they want their people to be taking more risk; testing, learning, being brave and finding the next breakthrough for the business.
And these two seeming opposites absolutely live together in successful organisations where a culture of taking and managing risk is created.
Fear of the unknown
So why do we fear failure and not take risk? Part of the human condition is that we want to show success to others as a way of cementing our position in society. Therefore, we are programmed to look for safety (it stopped our ancestors being eaten by predators) and to fight change if we cannot see the benefit (better the devil you know).
The word risk conjures up the worst-case scenario rather than the best-case.
In the working world, failure strikes at the core: could I lose my job over this? The job security fear is both understandable and strange – as I think we are all more likely to lose our jobs by not experimenting and taking risks.
It was one of my previous bosses who pointed out that it would be hard for any of us to make an error so big that it would sink a company the size of Diageo, or even have a material difference.
There are exceptions – notably in the banking sector in recent years – but if your business or brand is in good shape, bar the odd totally unforeseen event, most can manage a temporary failure.
Maybe some people are so close to what they do that they lose sight of the broader picture and this can inhibit risk-taking.
I am lucky enough to oversee over 20 brands. If we try something on one brand and it doesn’t work then we’ll be absolutely fine and I won’t lose sleep over it.
The only issue is that the brand manager may, so we need to take away that fear by reassuring people that we value experimenters and entrepreneurs; that we want to see things tested and that we learn from what doesn’t work.
One of the things I say to my team is that we need to always have “one foot in today, one in tomorrow”. The foot in today is simply the current day-to-day delivery – performance management, delivery of projects and initiatives.
Tomorrow is about looking at ways of making your current growth drivers better and/or looking for new ones – and this should involve testing and experimenting and taking some risks. Simply put, we need to strike the right balance.
I think we also need to realise there are different levels of risk and people have very different relationships with it (back to the management survey question mentioned above). Giving everything up to pursue your dream is an amazing thing to do: high risk, potentially high reward. That’s not for everyone.
One person’s risk is another person’s everyday. It’s down to personal interpretation.
Is launching that brand or line extension you’ve got a good feeling for about a risk? Is taking that new role overseas a risk? Is recruiting someone who’ll shake your team up a bit of a risk? Is redesigning your organisation around an emerging future state a risk?
We can all afford to take a risk, however we interpret it. We will find our business better for it and it should enrich us too. As a well-known advertising slogan once said, what’s the worst that could happen?