How can you become a more effective organizational leader by taking risks?

We talk more about uncertainty than about risks. Reframe your conversations. When we discuss the likelihood of something happening, we often use the word "risk". However, the term "risk" can be misleading as it evokes negative emotions associated with danger. The word "risk" comes from the Italian word "rischiare, " meaning to run into danger. Instead, it's more accurate to use the term "uncertainty", which is more neutral and indicates that there may be a lack of knowledge to predict outcomes or assess the chances of success. In the context of leadership, talking about uncertainty rather than risk is more constructive as it does not create a negative emotional response and focuses on the right angle: what is uncertain, what is unknown

Taking risks is the pathway to growth, innovation, and impactful change. It's about embracing uncertainty as an opportunity rather than a threat. Risks challenge the status quo and force us to adapt and evolve. They are the stepping stones to achieving goals that seem out of reach.

For me, the most important motivation to take risks is the opportunity it will give to allow dreams and ambitions to become reality. Too often it is the case that individuals and organisations are tied down, paralysed by numbness, frightened of change and the uncertainty that comes with it. But without taking risks, we limit ourselves to the status quo and potentially miss out on the rewards of obtaining what we truly want. It might be a new business, pursuing a new career, or asking someone out on a date. All these have an element of risk, but they also have the rewards of success which of course can be life-changing.

It is said that some of the biggest mistakes in business are: Not spending enough time thinking about decisions that are irreversible. and Spending too long thinking about decisions that are easily reversed. Understanding, if the decision or risk is easily reversed, is the first step to taking more chances and moving more quickly. It can also help chunk down bigger decisions into smaller iterations so that you test, learn, and course-correct throughout the process.

Research is a key factor when it comes to deciding which risks to take. Take your time and conduct a thorough analysis. Measure how much you will gain if you win and assess how big your loss will be if you lose. Another often overlooked step is to make a plan for what to do if problems emerge. You can't just stand there and watch things fall apart. Always have a plan that will allow you to either fix the situation or at least stop further consequences.

Here are some further steps you can take to effectively manage risk-taking: 1. Set clear objectives and criteria 2. Conduct thorough risk assessments 3. Develop contingency plans: Prepare backup plans or alternative strategies to address potential negative outcomes 4. Continuously monitor and evaluate: Regularly monitor the progress and outcomes of your risk-taking 5. Communicate and collaborate 6. Develop a learning culture: Encourage a culture of learning within your team or organization 7. Periodically review and update risk management strategies Remember, risk-taking is an inherent part of innovation and growth. By actively managing risks, you can maximize your chances of success while minimizing potential negative impacts.

Every skill needs practice, and risk-taking is no different. Theory is good, but it won't make you truly embrace taking risks; practice is the only way to do this. Start by taking small risks that won't have a terrible impact if things go wrong. You need to make mistakes so that you can overcome your fear. And this is not only about risks in the business world; it is about your mindset. Try taking risks in your daily life. Whether it's trying a new hobby, approaching a challenging conversation, or venturing into unfamiliar territories, taking risks in various aspects of your life can help you build resilience, adaptability, and the confidence to face uncertainty.

Understanding that taking the calculated risk could change your career... or not. But without even trying there won't be change at all. Are you content with current situation? If not, risk might be more than worth taking.

Risk is subjective, we all look at it differently and we all have our own thresholds for fear and anxiety. We call it risk ‘risk appetite.’ On the other hand, risk becomes more objective with the amount of information that is gained about the subject matter. Here is how you can overcome the fear of risk taking: - Educate yourself on the topic, read as much as possible and from as many perspectives. - Come up with different options, ranging in risk severity. - Test your theories with a peer group, colleagues, friends, coach, mentor, or support group. - Understand that failure is part of a growth process. Remember that risk is not an exact science

Align your risk-taking with your objectives and values. Assess costs and benefits, recognising that action and inaction carry risks. Try to find the right balance taking into account context and timing. Being able to determine the appropriate times for action and caution is a cornerstone of sound decision-making.

To have a balanced approach to risk-taking and risk-avoidance, an organisation needs to have a clear understanding of what threats they are facing in their operational environment. This can be achieved through a Risk Management process. Threats and the organisation’s vulnerability to them can then be shown as a risk calculation. Organisational objectives then need to be taken into consideration, highlighting what the impact on the business would be if the risk became a reality. This will allow decisions to be made on whether to transfer, eliminate, accept, mitigate or share the risk.

Great leaders improve their prudent risk-taking by choosing faith over fear; a boundless faith in their vision, their mission, and those whom they serve. Leaders perpetuate a culture of success across their teams. They don’t fear failure; they only fear the failure to try. Great leaders always have high expectations, set seemingly impossible goals, achieve them, and then aim higher. They are relentless in their pursuit of excellence, but they don’t seek perfection. In all they do, the best leaders inspire impact.