Rewarding
Risk
Takeaways
“Risk
taking only happens when it is rewarded.” Jack Welch
Rewarding Risk
What it Means
Rewarding
risk taking is about reinforcing a value. Generally, the only time you should
take risks is when risk taking is supported by your company or department,
because the reality is that most risk-taking organizations miss more than they
hit. So, if you want risk taking to be a part of your corporate culture, then,
you have to reward it.
Why it Matters
·
People
naturally avoid taking professional risks given the possibility for failure.
You must actively and publicly reward risk taking if you want it to happen.
·
Not
all risks will pay off, but valuable lessons can be learned even from failures.
·
Risk
taking is often, but not always, required to accomplish your mission. Organizations
that go to bat on some big new ideas often have high potential gains.
·
You,
your team, and your organization must develop a shared understanding of what
risk means, and when it is appropriate and not appropriate to take risks.
·
Leaders
set the example, and if they value risk taking, they must promote it by taking
risks themselves and making it part of the organization’s value.
Action Plan
Rewarding Risk
“If risk
taking is important to your company, then put it in your value statement.
Management is actually pretty simple once everybody understands what the values
you want are.” Jack Welch
Your Starting Point
1.
Would
you characterize your organization as pro-risk or risk adverse? What values
does your company display that support your characterization?
2.
Are
there ways that your organization or department could benefit from more risk
taking? If so, what are those potential benefits?
3.
What
is the biggest obstacle to risk taking in your organization and in your team?
4.
What
professional risks have you taken at work over the last six months? How did
those turn out? Did your organization reward this risk taking—or punish it?
5.
When
is the last time you encouraged someone on your team to take a professional
risk?
6.
If
you could do one thing to increase the number of (appropriate) risks your team
takes, what would it be?
Quick Wins
1.
Acknowledge
to yourself and to your team that taking risks involves investing time and
energy in an endeavor that may fail.
2.
Develop
a shared view of what risk taking means in the context of your team an discuss
the benefits of risk taking. Cite examples of where risk taking helped the team
learn something or improve performance.
3.
Set
up time each week for you and your team to review the latest needs in your
industry or functional area. Take note of “wins” your competitors have had and
discuss the risks they had to take to achieve those wins. What kept your
organization from taking that risk?
4.
Take
the exercise in #3 and flip it around. In what ways is your competition playing
it “too safe?” What areas have the potential to deliver the biggest wins if you
were willing to take the risk?
5.
Encourage
your team (and yourself) to set aside a certain amount of time every month to
have a “what if” session. Focus the discussion on, “If there were no repercussions
from taking a risk that failed, what would I do to grow this business?”
6.
Develop
a list of two or three appropriate risks you or your team can take in the next
month. As part of this activity also discuss what obstacles exist that
currently keep the team from taking more risks.
7.
Develop
three ideas for how you can publicly reward risk takers, e.g., team
celebration.
Reward What You Value—Regardless of
the Outcome
The
practice of risk taking—if it is one of your core values—needs to be talked
about and praised just like every other value that we have discussed. That mean
that you may find yourself facing situations where your team has really tried.
They’ve given it their all. They’ve done their research, put in long hours and more
that you could have ever asked them to do: and they’ve failed. Or, more
accurately, the project failed.
This is,
of course, what it means to take a risk. If you were guaranteed of being
successful, there would be no risk. Sometimes things just don’t go the way you
wanted them to go. But when things don’t go well, there are two critical
practices that you should follow if you want to continue to support the value
of taking risks:
·
Analyze what went wrong
If
you don’t learn from mistakes and failures, there is absolutely no reason to
believe that you will get it right next time. If you truly value yourself as a
“learning organization,” then this is a critical time to practice what you
preach. Don’t just shrug your shoulders and move on, and don’t’ spend the next
month lamenting. Neither of these responses is going to make help your
organization to win. Hold a meeting and talk about it. It’s not about blame;
it’s about getting stronger. What factors did you fail to consider? What moves
did your competitor make that you weren’t prepared for? What went wrong in the
process? What economic events took place that you could have been prepared for?
·
Celebrate the effort and the
willingness to take the risk
If
you don’t acknowledge the effort, you undermine the willingness of the team to step
up and give it their all the next time there is a risk to be take. Have a
party, give out some awards, even some modest bonuses if finances allow. And
don’t make it a serious somber event. Yes, it hurts, yet I many even be costly
and embarrassing, but don’t let the loss defeat you. Celebrate the effort, the
team and focus the even on “onward and upward.” You may have lost this one, but
there are many opportunities out there, and you need to have your team in top spirits
if you’re going to win the next one.
Game Pages
Rewarding Risk
Your Starting Point
What is Risk?
Risk is . . .
Taking the
initiative to find new ways of improving performance.
A great
new way to learn important lessons.
A possible
opportunity to win big.
An
absolute requisite to growth.
Something
to celebrate.
Is NOT. . .
An excuse
to be reckless.
Always
appropriate.
Something
that can be done halfway.
Always
likely to work out the first time.
List of appropriate risks that you,
your team and your organization have taken and could take in the future.
Examples of Past Risk Taking:
What was
the risk? Was it appropriate?
What did
you, the team, or the organization learn?
Did the
team and/or organization reward the risk taking? If so, how?
Second example
Third example
Fourth example
Fifth example
Examples of future risk taking
ideas:
What is
the risk? Is it appropriate?
What would
you learn or accomplish by taking this risk?
How would
you celebrate it?
Second idea
Third idea
Fourth idea
Fifth idea
Managing the Impact of Risks
Is there a
big idea you’ve been itching to try? Track your potential gains, as well as any
possible negative consequ4ences, in the chart below:
Big Idea:
____________________________________________________________________________
Why do it:
___________________________________________________________________________
If it Fails: ____________________________________________________________________________
If it Wins:
___________________________________________________________________________
Big Idea:
____________________________________________________________________________
Why do it: ___________________________________________________________________________
If it Fails:
____________________________________________________________________________
If it Wins:
___________________________________________________________________________
Big Idea:
____________________________________________________________________________
Why do it:
___________________________________________________________________________
If it Fails:
____________________________________________________________________________
If it Wins:
____________________________________________________________