Risk Taking and Leadership

Written by: Craig Twombly

Published: January 2012

Risks are an inherent part of everyday life, some risks are big and some are small. When you get into a vehicle and drive to work, you are taking a risk. Although it does not seem that risky as I write this, it is. After driving for years, it has become second nature just as brushing your teeth or tying your shoes. This is not to say I am over confident in my driving. Yet, because it is done every day, it has become part of the routine you forget the sheer gravity of driving. Last year during a snow storm, I found myself far from home and needing to get home. During the slow ride trip home I really had time to think about the fact that this is dangerous and the risks versus reward is huge. In this day of texting and using our cell phones while driving, the risk is even more than we think. We have laws in place to protect people and rules of the road to keep everyone safe. We can be involved in an automobile accident where the car is ruined or we're injured and so on. And the point is that risks are everywhere in life and unavoidable.

Risk as defined by Merriam-Webster's dictionary is a: possibility of loss or injury, b: someone or something that creates or suggests a hazard. Risks happen all around us, not only in our personal life but our professional life as well. It is easy to compartmentalize risks as the example above. Yes there is real danger in driving and we see on the news almost daily the outcome of these risks. As leaders of a team or staff it is important to know that there is risk taking involved. I recently sat down and had lunch with a man who is a local business owner. I asked him why after so many years he was successful and still loved it so much. I was not all that surprised at his response, "I may not be successful at something I try today, but you better look out I will be back tomorrow." As a business owner he thrives in the challenge of trying to succeed every day. He makes decisions and reviews the outcomes. This sometimes is taking on a whole new product line or carrying a new vendor that no one has heard of. Either way he is taking business risks. One of the personality traits I admire the most is the fact that he will take risks and loves every minute of it, and yes he has failed more than once with some of those chances.

To be successful as a leader there is an inherent need to take risks. As a freshly minted manager out of school, I was ready to tackle the world (and yes I thought I knew it all) and needed no direction doing so. At my first real review six months into management training, my training manager sat down with me and we discussed what my performance was to this point. He said that I lost money on every shift I worked. I remember thinking, "How could that be, people loved working for me, I had great customer satisfaction reports" and so on. As we sat and discussed the performance he reminded me that all the scores are great but if you can balance financials inside all of this, we would not be in business. After a great sit down and few looks at myself in the mirror, the overwhelming message was I needed to take more chances. He had spread sheets of the daily labor I ran on my shifts, what discounts were given and so on. Yes, the people were happy and the customers loved the service but I realized labor is not a fixed item. It is a moving target that flows with the volume of business that comes through the door. The trick for any restaurant manager is to take a chance and cut hours or send employees home if business is slow. In reverse if it is going to be busy, add staff. The theory is great until you find yourself bussing tables while on a wait on a Tuesday afternoon. In my position as a newly minted manager, I was nervous to cut hours. I did not want to upset the employee who lost work hours and I certainly did not want to upset the customers who had to wait for a table as they looked at empty tables all around them. The training manager gave me ideas and hints on how to judge business, yet at the end of this second conversation he looked up at me and simply said, "If you don't screw it up from time to time, you’re not taking enough chances."

By no means am I suggesting that to be a successful leader you need to go to work and take unimaginable risks. Maybe the risk is making a customer decision on the spot, or reversing a fee to a customer, or it might be addressing a performance issue without waiting for your boss. No matter what it is, all leaders need to take risks and chances. We put together a few simple steps to start the process

1. Discuss with your boss- the first step in taking more chances is taking the risk and sitting down with your boss. Ask your boss what they consider risks and where they see your need and what they expect of you and your development. This will help you determine where to start and where not to go.
2. Be prepared to learn- with risk comes reward and failure on occasion. We will all make mistakes, yet it is a true leader who learns and grows from them. Your staff is watching you and by not getting emotional or upset and learn instead, you set the standard for all else to follow. Reflect back and determine if you are heading in the right direction.
3. Evaluate the risks - with your boss from time to time. An outside perspective often lends a hand for clarity.
4. Jump in, don't wait! As we have discussed in previous articles it is easy to put it off until tomorrow. Tomorrow then leads to the next day and so on. The rule we always discuss is, "If you're not uncomfortable..."

These are just a few thoughts for you to ponder, and as always we want to hear from you if you’d like to discuss this article.

Craig Twombly

Craig is the primary facilitator at Priority Learning, he is responsible for conducting an array of leadership series offered and consulting assignments from communications to team development in organizations ranging from the service industries to finance, manufacturing and more. Having extensive experience at balancing the business needs with the wants and desires of people are Craig's strongest assets.