A few weeks ago, I wrote about “Taking Risks“ and the desire to learn more about why people don’t take risks and learning to do so. Since then, I’ve been reading more about risk and considering risk in my own life and work. Frankly, study of the topic can be a bit overwhelming. There is a tremendous amount of information about risk from many disciplinary perspectives: history, economics, finance, military strategy, psychology, biology, game theory, and so on. The study of risk seems to be a lot like the study of leadership. The more we study it, the less we seem to know about it.
Nevertheless, I have found several very helpful insights. In “How Risky Is It, Really?,” David Ropeik points out that people are very good at dealing with immediate, simple risks. For example, “Given the current level of traffic, should I cross the road now?” Or, “My kid has a compound fracture; should I drive a little bit faster to get to the emergency room?” And, “Egg nog is not a part of my diet plan. Is enjoying one glass for the holidays going to be a problem?” These are all relatively immediate and simple issues and people generally have an easy time deciding what kind of risks to take in these situations.
On the other hand, we are not very good at dealing with the risks associated with long-range, complex issues. A perfect example was and is the “so-called fiscal cliff” crisis. (For a very good overview of what the “fiscal cliff” is, see this article from the Council on Foreign Relations.) The fiscal cliff issue has been building up for decades, and will take many years to solve. It is also extremely complex in its causes and effects, thus making identification of the solution difficult. (Don’t let the fact that a deal was reached Monday night fool you. The root problems are not fixed. This is just a band-aid.) Therefore, it is also difficult to assess the risks associated with any particular course of action. That’s one reason why our folks in Washington weren’t able to agree on something sooner.
So how can leaders learn to take risks with long-range, complex issues? First, it helps to understand what taking a risk is. Simply put, taking a risk is “moving forward without 100% certainty of the outcome.” It is about making decisions and taking action in situations where you do not know the outcome, but moving forward nevertheless. Leadership is inherently about moving forward. Thus leadership is all about taking risks.
OK, so we all understand what risk is, but how can I, as a leader, do a better job taking appropriate risks? Some insights was offered by Kevin Cashman, in his book The Pause Principle (Berrett-Koehler, 2012).1 In brief, the Pause Principle is the idea that in our volatile, complex, and ever-changing world, higher performance from leaders comes not from acting faster and with more energy, but by slowing down and pausing for deep reflection. He captures this idea in the phrase “Stepping back to lead forward,” and he devised Seven Pause Practices to enable stepping back to lead forward. I don’t know if Cashman intended his seven practices to be applied to helping leaders take risks, but the fit is apparent. Here are the seven principles:
- Be On-Purpose: “Purpose is the intersection of competency and contribution that aspires to achieve something bigger, something beyond us.”
- Question and Listen: Ask questions to gather information. Listen to incubate that information into understanding. This is a key component of the pause process.
- Risk Experimentation: A key role of management is to minimize risk, but leaders introduce a creative tension in the organization by experimenting with risk and monitoring the “intersection of current reality and future reality.”
- Reflect and Synthesize: Pause to reflect and synthesize new understandings of self, talent, and innovation.
- Consider Inside-Out and Outside-In Dynamics: Pause to monitor and assess what is happening inside—inside yourself, inside your followers, inside the organization. Also, pause to monitor and assess what is happening outside—between you and others, between followers, between people and processes, between the organization and the outside world. This step is the genesis of “profound personal, strategic, interpersonal and organization growth.”
- Foster Generativity: Consider the next generation of leaders. Their preparedness for leading is more important than your own success today.
- Be Authentic: Authentic leaders are highly attractive and engaging. Followers gather to join what is a truly unique leader and they commit to making a difference.
I’m sorry if you were looking for a simple, three-step formula for being more effective in taking risks. The above takes commitment and work. However, if you are serious about taking more risks, I suspect you were already prepared for that reality. It is helpful, though, that Cashman’s process involves slowing down. These seven steps are about being more reflective and thoughtful, not rushing in like a wildman, making numerous radical changes all at once.
As you look ahead to what 2013 holds for you, is more risk-taking on the horizon? I would like to hear about that. I would like to explore with you, one-on-one if we can, the risks you are considering and how you can prepare for them. More risk is on my horizon. One example is that I will be taking my first trip to West Africa to conduct a leadership training conference. This is a risk in personal safety, stress in the family, effect on my other work responsibilities, and with finances. It is a complex issue requiring me to pause and reflect about how to be successful with this risk.
Welcome to 2013. Whatever your plans for the year, whether they include more risk or not, I pray that God uses you for great things this year and that you see his hand in all you do.
1: The material presented here regarding The Pause Principle, by Kevin Cashman (Berrett-Koehler, 2012), is based on the book summary published by Soundview Executive Book Summaries.