Risk Averse

Watch your step.

Like other parents I look back with joy at the act of raising my kids while at the same wishing I could have done things better. Like letting my kids take more risk for example.

Corporate America can say the same thing, but there’s still time to start getting this right.

Somewhere along the line – 1970? Late 60’s? – we began to become cautious. Too cautious. Much like the parent who delays the inevitable bike riding lessons with all their attendent bumps, scrapes, bruises and tears, we have backed ourselves into a paralysis of potential peril.

We don’t give straight feedback to anyone for any reason:

  • Applied for a job and been turned down? You’ll never know why
  • Tell the truth to an employee about their performance in language they can understand? Not likely
  • Provide a meaningful, truthful reference on a former employee? Not in this lifetime
  • Acknowledge deficits in products or services? You didn’t hear that here
  • Tell the CEO the strategy is a fantasy? Nope

Somewhere, somehow we became more and more risk averse. We’ve let the potentiality of negative reaction (up to and including the dreaded lawsuit) stop us from being clear, honest and yes, responsible. We are too timid by half.

But great companies – and great nations – are not built by the faint of heart.

Let me be clear with you, a little risk is a good thing.

Ask any risk manager and you’ll find they are very comfortable with the concept of assessing and managing risk. They don’t tell their company they can’t do something, they give them options around how to do it more effectively and safely. Risk managers are my heroes: they get stuff done.

Risk managers are comfortable with managing risk because they understand there are few certainties in life and many probabilities but avoiding all risk is best done by avoiding all action. This is not feasible.

No one, including me, advocates taking stupid risk. The question is are you managing risk like a professional, or are you defaulting to a worst case scenario in every instance never trying to stretch beyond the safest answer. Should you do so, not much will ever get done.

A final thought. We are not talking about risks with product safety, consumer health or the environment. There are indeed many companies who take those risks knowingly – they are not champions in any sense. We are talking here about risking the truth, taking the chance to be real with people: customers, suppliers and employees.

In a world that seems to operate on two extremes – the cowboys who do whatever they can get away with (Wall St) or those who play it so safe nothing gets done – there must surely be a place for the professional who can assess, manage and operate with both risk and honesty.

So take that chance on riding a bike again, and try getting comfortable with the truth. A little risky perhaps but the ride will help you grow.

 

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