Leadership and Risk: Four Questions to Help You Decide

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Leadership and Risk: Four Questions to Help You Decide

Are you risk averse? Are you hesitant to step off the smooth, comfortable path of other’s success or do you seek opportunities to blaze a new trail? Are you willing to take a chance on someone else?

Leadership is risk and taking risks can lead to great success or great failure. But, unwillingness to take at least some risk is more likely to lead to failure in the long run.

So, leaders might as well embrace risk.

That doesn’t mean live your life on the edge, going as far out on a limb as possible and taking stupid chances. It does mean a willingness to try new things and accept new challenges. It also means encouraging others to do the same thing and supporting them when it doesn’t work out the way they planned.

How do you know if a risk is a good idea? Contemplate these four questions to start evaluating the action you or one of your people are considering.

1. Why are you considering this course of action? Is there a need to take some sort of action or is it an opportunity you see? Does the reward justify the risk?

2. What will happen if you don’t take the risk? Everything has a consequence, even not taking action. What’s the cost of inaction?

3. Are there ways to mitigate the risk? This doesn’t mean make the risk go away, but rather reduce and manage it as much as possible. When Lindbergh crossed the Atlantic he took every precaution he could, but the crossing was still a huge risk.

4. If the risk involves allowing someone else to take risky action do you trust them? How much will the proposed action stretch their skills? You have to determine how much of a stretch you’re willing to support. Remember, their success is good for you too, but as the leader, you also own their failure.

Not every risk is a good idea, but failing to take any risk is a sure way to be left in the dust of those that aren’t quite as cautious.