Risk and Leadership

Leadership is inherently about taking risk, risks with people and risks with situations. It is the ability to judge when risk has to be taken and mitigating that risk whilst understanding how much risk needs to be taken that truly marks out a good leader. Humans are naturally risk averse, their instincts are designed to protect them and therefore they like to live within their comfort zone. And yet if we were all to live within our comfort zone mankind would not be progressing and pushing at the natural and technological boundaries in the way that we are. Let us look at the recent oil spill in the Gulf of Mexico. The ability to drill in that depth of the ocean was a risk but a risk worth taking, however to do it with a paucity of planning for contingencies should an accident happen and the lack of the necessary  safety measures to prevent an ecological disaster was not. Leaders will always serve several masters in their decision making and leaders need to remember the moral component of risk taking in all their deliberations.

Continuous improvement and development are all about risk management. As to progress an organisation has to learn and to learn there has to be experimentation and with experimentation comes failure. Climbing a ladder involves a risk and we naturally mitigate it. For it is ‘laddership’ that is so important in leadership and the true understanding of risk. One step at a time the more competent the more confident and yet that confidence should never be allowed to become over confidence. ‘Laddership’ is about rungs and levels and risk can be viewed this way.

Humans naturally remain in their Comfort Zone Bubbles if they believe they are going to be criticised for experimentation and yet it is experimentation that leads evolution in whatever sphere. A blame free culture where experimentation is encouraged is where true development will happen. This normally happens when an organisation is in the doldrums or has hit rock bottom as it is often only then that leaders are happy to take the necessary risks for experimentation as they have nothing to lose.  Hence the cycle of moving from prominence to the also rans always repeats itself unless leaders are prepared to take risks and empower their people.  Look at the rise and fall of an empire it starts with a drive a hunger that empowers risk and ends as its exponents clutch the comforts they have made their masters and are so frightened of losing.

To empower people the overarching philosophy in any organisation has to be a positive one. How do humans best learn through positive encouragement or negative criticism? Positivity and praise are key elements that underpin a risk culture as they prevent the blame being passed and hence people avoiding risk. Key is to ensure that responsibility is delegated downwards whilst accountability remains at the highest level.

Risk must be taken consciously and hence an organisation and its leaders need to be aware of the risk they are taking. This requires good communication practices and a clear understanding on expectation and boundaries for it is only with these in place that true informed empowerment can happen. If the box where freedom of action is understood the liberation is total inside the box and communication expected when venturing outside the box. If expectations and boundaries are not understood then inevitably restrictions are self generated and limit the empowerment particularly when a blame culture is dominant.

Unfortunately even with the best will in the world mistakes will happen and they will happen with no malice of forethought or wicked intent. They will happen because we as members of the human race are fallible. The Human factor must always be considered in contingency planning and the human factor must always be taken into account when reviewing a failed action or procedure. Mistakes will happen it is the speed of recovery that ensures they are not fatal. No one sets out to do a bad job, most humans thrive in a positive culture. As long as mistakes are learned from then they must be seen in a positive light as part of the learning. As failure is essential to success then the risk of failure or mistakes must be planned for if a non-blame culture is to hold prominence within an organisation.

A blame culture exists if an organisation or individual focuses on the problem and not on the solution. Yet the solution is the home of the required development. Hence risk has to be part of development and blame has to be banished to the background if the drive for success is to dominate the fear of failure

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