Our work with clients as well as our research has taught us that organizations that have a high tolerance for risk have the healthiest cultures and are usually the most successful in terms of results.
What we have discovered is that it’s not enough just to tolerate risk. To use a baseball metaphor, great organizations actively seek out risks and instead of hoping for a single encourage their team members to swing for the fences!
Now, this doesn’t mean that great organizations will roll the dice without a reasonable chance of being successful or without doing their due diligence. But it does mean that their appetite for risk is such that their less successful competitors tend to look at them and think “What are they thinking? That will never work!”
Here are five ways you can increase your tolerance for risk and encourage a culture of experimentation:
1. Start by taking a number of small risks rather than one big one. If you’re not sure that your culture (or your own stomach!) can take an enterprise-gambling risk, take a few smaller ones that will ‘hurt’ a bit if they don’t pay off but won’t threaten the organization’s viability. Over time, you will learn more about your core competencies, your own appetite for risk, and where an educated gamble might pay off for your organization.
2. Support the natural risk-takers on your team.
When you assign a risky project or experiment, make sure you clear some things off the plate of those responsible so that they can focus. When their plans appear to be faltering, support them verbally and supply any needed resources. Praise them in front of other team members and tell their stories.
3. Build risk-taking into your compensation and rewards system.
Nothing communicates a culture of experimentation more than honoring successful risks and even praising and rewarding worthy risks that may not have yet panned out.
4. Make sure that the risks you take are around issues you and your team care deeply about.
It’s one thing to take a flier. It’s quite another to take a risk that, if it pays off, will advance your organization’s mission or live out the values you hold together.
5. Make sure that you build in ways to glean lessons from your experiments.
Have the whole team debrief a risk-taking project, both midstream and at its conclusion. The goal of this public debrief is not to scapegoat or shift blame when a risk has not paid off. It’s to tell the story of the adventure of the experiment, honor those who put themselves on the line, and craft takeaways for what you can do better next time. It’s important for a healthy culture to be a learning organization – all the more important that you learn from your experiments so you can consolidate gains and avoid future pitfalls.
How about you? What have been your most fruitful risks? Where can you initiate some new experiments in your personal life or in your organization?