Ever hear someone say, “you snooze, you lose?” To most it’s just a clever cliché, but companies like Amazon, Netflix, Uber and Airbnb have used it as a core business principle to disrupt entire industries. In today’s marketplace, disruption is the new norm. The common thread among the casualties of disruption has been a failure to recognize the need for innovation or moving too slowly to adapt to change.
Most of us know that the biggest risk we can take—professionally and for the organizations we lead—is taking no risk at all. While we encourage our employees to take risks, leaders are always keenly aware that it can be a double-edged sword. We are charged with protecting the institutions we lead, but doing so through risk avoidance can be a recipe for disaster. So, how should leaders think about risk-taking as a strategic imperative for their organizations?
As someone who has worked in both the public and private sectors, I’ve learned that cultivating risk-taking as a skill and creating a risk-friendly environment for your teams is paramount for survival and success. That is not to say there aren’t pitfalls; there have plenty of instances where the risk I took didn’t work out. At the time, I didn’t imagine that the failures would lead to the tremendous insights about innovation and resilience that guided my career.
My advice to leaders is to consider the following:
1) Hire good people, give them a framework to operate and get out of their way. In a previous article, I shared my perspective on the importance of hiring people who bring different skillsets and aren’t afraid to challenge the status quo or your assumptions. Once they’re onboard, how can you tap their creativity and experience to help drive innovation and change? First, ensure the team is aligned on the organization’s goals and metrics for success. Then, define your most critical challenges and offer the team a blank canvas to paint you a new picture packed with creative solutions. Encourage them to take risks that are free from the influence of tradition and other constraints. When you trust the knowledge and candor of the people you hire, it’s easier to let them take risks on behalf of your organization.
2) Use your goals to guide risk-taking. Throughout my career, I’ve been fortunate to work for and be mentored by some exceptional leaders. Over the years, I’ve observed them take a variety of risks—from what would be considered measured to potentially catastrophic. The common theme among them was that their decisions were always tied to the goals of the enterprise. That’s because at the end of the day, you must be able to demonstrate the return on investment or value of the risks you and your team have taken. If it doesn’t help achieve the goals of the enterprise, then it is not worth consideration or resources. My advice to leaders is to build strategies that not only provide a clear roadmap for achieving your goals, but also embrace and equip your team with risk-taking as a critical part of their problem-solving toolbox.
3) Think—and act—outside of the box. It’s not uncommon to hear leaders challenge employees to “think outside of the box,” but how many enterprises are prepared to have them act outside of the box? For many organizations, policies serve as invisible fences that restrict their ability to innovate. If the goal is to drive change through innovation, leaders must remove barriers by ensuring that existing policies can accommodate bold action. For leaders working in industries that are highly-regulated, I encourage you to find ways to educate regulators about policy changes that can continue to support needed innovation.
While there is no-one-size-fits-all approach to evaluating and taking risks, my hope is that these three lessons will be helpful as you lead your enterprises through this period of constant disruption. When you run into obstacles, remember this famous quote from Thomas Edison– “I have not failed. I’ve just found 10,000 ways that won’t work. Many of life’s failures are people who did not realize how close they were to success when they gave up.”