Risky Business

Would you describe yourself more as a risk-taker or risk adverse?

If you’re a leader, I hope you’re not afraid to take some risks this year. A simple definition of leadership I like is “Leaders Go First.” To go first means to take a risk. To step out on ground that hasn’t been tested before. To be willing to look foolish if it doesn’t work out, but to make a way for others to follow you.

By personality, I would be the one who prefers to wade into the water from the shallows, rather than jump right in off the diving board. I want to watch a few others go off the ski jump before I try it out. But as a leader, I don’t always have that luxury. People are waiting for me as a leader to go first, test it out, and then they’ll follow.

People are waiting for me as a leader to go first, test it out, and then they’ll follow.

There are a few basic reasons you might avoid risks:

1. You don’t have all the information

You prefer to take calculated risks, so you need time to calculate and consider all the options. You want more information, research, skills and examples of others being successful in order for you to take the jump.

2. You may look foolish if you fail

Nobody likes to feel like a failure or embarrass themselves publicly. Some people’s opinions really matter, and it feels too damaging to potentially lose face with them.

3. You don’t believe the potential reward is worth the risk

There’s a common expression, “High Risk, High Reward.” But sometimes the level of risk is not outweighed by the reward—each of us has a threshold for how much we are willing to bet in order to potentially win big. A certain percent of revenue. A degree of physical safety. Our loved ones’ stability.

4. You may harm others or lead them astray

If you’re a leader, risks you take might affect others around you, like employees, shareholders, community groups or your family. You recognize your risk isn’t just about you and that’s a good thing! This will keep you from selfish risk-taking.

So, if you lean risk-adverse or risk-avoidant, you’re not alone. There is a lot of logic behind this based on the harm it may cause various aspects of your life. Not all risks are good risks.

As was famously said to the hero and leader in JRR Tolkien’s ​Lord of the Rings​ Trilogy, ​“It’s a dangerous business, Frodo, going out your door. You step onto the road, and if you don’t keep your feet, there’s no knowing where you might be swept off to.”

Just like Frodo, as a leader you must go first. It’s the burden and privilege of leadership. But take courage, there are good reasons to take risk!

Reasons you should take more risks:

1. You’ll never have all the information, but you can make calculated risks

Gathering information is wise before taking a risk. But there’s always going to be some element that we do not know or can’t predict. It wouldn’t be a risk if we had control of every possible outcome. Get the basic information about the road ahead, do your research, ask for advice from others and learn from their mistakes as well as your own. In this way you can take a calculated risk and understand what you may stand to gain or lose.

2. Most people’s opinions don’t matter

The list of people whose opinions of us really matter in life is quite short. Your spouse, parents, children…maybe a few other friends. The list of people we are trying to impress with our success, money, intelligence and titles is much longer, but in the big picture their determination of if we are a success isn’t going to matter. Recognize the level of risk you’re taking and if it might harm relationships with your closest stakeholders, or if you’re trying to avoid failing in front of an anonymous crowd. Take the risk and your loved ones will be there win or lose.

3. There is great reward from risks taken

Being the first to the moon, first to market with a product, or first to blaze a trail will often come with notoriety, wealth and influence in your industry. People will come to you in the future to teach them how to do what you’ve done, and if successful, your ideas will spread. But more than that, studies show taking risks is actually good for the brain. The ScienceDaily Journal, in an article entitled reports, ​”Daring and risk-willingness activate and challenge the brain’s capacity and contribute towards learning, coping strategies and development.” In short, the study shows that risk-takers are smarter.

“Daring and risk-willingness activate and challenge the brain’s capacity and contribute towards learning, coping strategies and development.”

4. You can empower others and enrich their lives

The joy of leadership is empowering others. When you take a risk, it invites others to do the same, to reach out to new heights never before imagined, to solve unsolvable problems, and to work towards the betterment of other people. Our risks can make other people’s lives better. Many cannot afford to take risks themselves, or don’t have the skillset you have. When you take risks, it serves others who come after you and can make their lives better.

Invent that solution. Write the words someone needs to hear you say. Create that program. Give your money to that cause. Serve others without it being returned to you.

Today, you are the youngest you will ever be, and also have more life experience than you’ve ever had before. So, what are you waiting for?

_{Reference: SINTEF. “Risk-takers are smarter, according to a new study.” ScienceDaily. www.sciencedaily.com/releases/2015/11/151130113545.htm (accessed January 9, 2021).}