Risk is a natural part of life. Just about every decision that we make has some level of risk associated with it. Some risk is inconsequential, such as the decision regarding the color of the shirt that you decided to wear this morning. On the other hand, some risk can have significant impact on you and those with whom you associate, e.g., whether you ask a specific person to marry you or not. We start taking risks from a very early age and if we didn’t, we would probably never learn how to walk! Without some level of risk, things would never change or improve and effective leaders understand this.
Do You Value Initiative?
We often ask our Performance Management course participants whether they would rather have employees who show initiative or those who just do what they were told to do. They always respond with “I want employees who show initiative”.
But initiative is a form of risk-taking because the decision that the employee makes could be wrong and negatively impact desired results.
Clarify "Appropriate Risk"
Effective leaders are careful to clarify what they mean by “appropriate” risk taking and consistently encourage both initiative and innovative thinking while helping employees understand what is appropriate by helping them understand the potential results of both failure and success.
We work with many organizations to help them improve performance and especially safety related performance. We know that the decisions that people make, both safety and non-safety related are driven by their understanding of contextual factors including themselves, others, the environment and the organizational systems.
We have discussed before in other newsletters and articles the concept of “local rationality” in that our decisions make sense to us given our interpretation of the context and the associated risk. For example, we may make a decision to forego wearing safety glasses because we are being rushed by our supervisor to get the job done quickly and safety glasses are not readily available. We accept the risk of possible injury because the risk of displeasing the boss is seen as greater in the moment (local rationality).
Creating a New Context
Effective leaders attempt to create contexts that control factors (pressure to rush) that can lead to poor decision making (not wearing safety glasses) while increasing the chances of effective and even innovative decision making (coming up with a plan to both wear safety glasses and get the job done quickly).
They do this by encouraging active dialogue about the workplace (context) and ways to improve that context to encourage employees to take initiative (appropriate risk taking).
Effective Leaders evaluate why both success and failure occur within the organizational context and do so without assuming poor motivation as a starting point. (See May newsletter for further discussion of contextual analysis and accountability).
What's the point?
Effective Organizations are filled with individuals who make good decisions about acceptable risk (initiative) because their leaders have created an organizational environment (context) that assists in that decision making.