Culture of Calculated Risk-Taking

My family and I are up in Blue Ridge Georgia this week for a little R&R and to pick up some furniture Tara and I ordered in March.  I rented a trailer and headed to the location where I was to pick up our furniture.  When I arrived, the parking lot in this tiny strip mall was jammed, but I saw an open spot and I began backing up my rather large trailer.  All was going smoothly until the trailer reached the side a brand new Honda Accord.  Yep, that's right, I crushed this poor ladies passenger side door.  Of course she came running out, the police were involved, I was embarrassed... it was a swell time.

After dealing with my "accident" and loading everything into the trailer, and as I jumped in the front seat of my wife's suburban and sat at the precipice of some well deserved self-inflicting shame and contempt, it dawned on me - sometimes, failure is ok if it means you have the confidence to try things.  

Now I know that sounds pretty crazy, but stick with me.  I challenge myself daily to do things I don't think are possible - it's a mindset that I've adopted over the years.  It's a mindset that said "pick up your family and move them to Florida and start a landscaping business."  If we are going too take risks, we are going win some and we're going to lost some.  But as T.S. Eliot says “Only those who will risk going too far can possibly find out how far it is possible to go.” 

Now how does this apply to you?  Well, part of being an outstanding employee and a great leaders is learning to (1) stretch yourself by constantly testing and expanding our limits, and (2) do the same for those you lead.  This means learning to accept failure, and like I said above, I was ready to unleash a mental tongue lashing on myself for being so careless and running into that poor ladies car - but I caught myself.  You need to learn to catch yourself, and even more important, learn to catch yourself when others are involved.  To be great, and for our company to be great, we need to learn to take calculated risks, individually and corporately - it's actually consistent with our Core Value of resourcefulness.  

In at article in Entreprenuer magazine entitled 3 Ways Companies Can Encourage Smart Risk Taking (A) by Salim Ismail, Mark Zuckerburg  agrees, noting, “The biggest risk is not taking any risk.”  Here are the 3 ways we encourage smart risk taking:

Resist the urge to say no

To protect its organization from risk aversion, Amazon has employed one simple rule that business leaders should consider emulating: “the institutional yes.” If a subordinate comes to manager at Amazon with a great idea, the default answer must be yes. If the manager wants to say no, he or she is required to write a two-page thesis explaining why it’s a bad idea. In other words, Amazon has created friction for saying no, resulting in more ideas being tested (and thus implemented) throughout the company. 

Never stop experimenting  

To effectively marry execution with innovation, leaders need to encourage experimentation to take place.  Too often we simply accept that things are the way they are for a good reason.  We need to always challenge this thinking.  For example, I can remember a job where it took a maintenance crew (3) hours to complete certain tasks on a job; then we replaced the foreman and all of the sudden that same crew accomplish twice as many tasks in the same time.   The new foreman didn't have the "old way" of doing things cemented in his mind and he approached the job differently. Experimentation makes room for this kind of thinking.

Reward insightful experiments   

When people teach children, they say, “Keep trying.” But at some point individuals shift into a culture where risk and failure are not tolerated, especially in business. One way to reverse this is by celebrating risk in order to counteract a cultural resistance among employees to failure.  For example, the Procter & Gamble Heroic Failure award honors the employee or team with the biggest failure that delivered the greatest insight. Similarly, Tata offers an annual Dare to Try award, which recognizes managers who took the biggest risk. 

In closing, I am not encouraging foolish, un-calculated risk taking. But what I am encouraging is the notion that appropriate risk-taking, that's consistent with our Guiding Principles and Core Values, and doesn't put anyone at physical risk, should be encouraged.  And when it succeeds, we celebrate.  And when it fails, we celebrate that too (as well as learn from it).

Question

Can you think of something you or someone working for you has wanted to try but been afraid to risk it?  Maybe you need to re-think that...just make sure there's no Honda Accord in the way!

(A) Source: Entrepreneur Magazine, October 16, 2014.