Shape the Risk Through Your Head & Heart
I'll never forget the first time I went scuba diving. We were in the Caribbean and our friends wanted to do a discovery scuba dive which is the first step towards getting your PADI certification, but what strikes my memory is how I felt the day before. I was both excited and panicked to the point that I was worrying over sharks, drowning, the bends, or anything else I didn't know about the great deep.
Of course, a discovery scuba dive is a shallow dive and under controlled circumstances with a certified diving instructor, but I did not know that when I signed up for the experience. So, with a head full of possibly fatal outcomes and only hours before the first dive, I went online and wrote out a legal will. Looking back it's hard to believe that it would stand up in court, but it seemed to give me some solace that if this was the end, my last wishes were documented.
We all know that everyday life has risks. Some risks like driving a car, taking a bike ride, or getting on a plane we have become accustomed to.
However, how does risk impact leadership? Can we lead without risk? Is the risk of failure unacceptable? Can we be a trustworthy leader without recognizing and managing risk? Could too much safety compound risk? Most importantly, how can I lead through risk without letting my concerns start to make all those under my influence feel uncertain?
When dealing with risk, we have to find a balance between our heads and hearts.
As leaders, we are weighing the data that we have as opposed to what we want to have. Not knowing all the details can make it feel like we are going diving in open water without taking the proper precautions. Our head may tell us that we need to account for all the risks, but that is not always the case.
Jeff Bezos, CEO of Amazon, said in 2017 in his annual shareholder address,
"Most decisions should probably be made with somewhere around 70% of the information you wish you had, if you wait for 90%, in most cases, you're probably being slow."
The data gap of uncertainty needs to be managed continually. The best way to go after that is to interrogate the list of issues with the question of "Why?" If you're familiar with Root Cause Analysis, the "5 Whys" is an excellent strategy to gain clarity and create an actionable plan.
Then there are the emotions of the heart. Like a weight scale, every day we need to know where we are between Hope and Anxiety. The Leader's breakfast has to be filled with hope. Anxiety and fear will narrow your perspective while having hope will allow the freedom for creativity and options to grow and thrive.
Take on risk in these steps:
How big am I willing to fail in order to learn?
What are the actual worst-case scenarios of this risk?
What concerns me the most?
Why is that the most concerning item?
Why did you give that answer? (Let this answer be top on your "to-do" list if you go forward.)
What will I lose if I don't take this risk?
How much do I stand to gain?
Run these question in this order and allow the upside to questions 4 and 5 to have the last word in your reflections.
Not only did I survive the first scuba dive, but I have also been back and dived again and again. I love it. I wish I could do it more. By recognizing there is room for the unknown and mixing in hope,
I've come to realize that risk can be managed well by interrogating the unknowns and making room for hope.
Jeff Gerhardt
Founder & Principal Consultant
With 20+ years of Corporate success, Jeff is passionate about working with leaders of purposeful organizations to help them see past the horizon, anticipate the path, and have an organizational culture that rallies their cause.