Being risk adverse ruins us

Person rock climbingThere’s a fine line between being stupid and being canny. In the business world, many decisions are approached with the goal of minimizing risk, and a large part of that is because we don’t want to look stupid. We don’t want to lose, to fail, or be held accountable for a negative outcome. Therefore, businesses tend to be very cautious.

But you don’t get much of a reward without much of a risk, so the goal is always to risk the least amount for the most reward. The problem with this approach is that it stymies creativity and initiative. You can get a little reward with a little risk, but you can’t blaze a new trail.

When we approach anything, be it business or hobbies or life in general, with a risk adverse mindset, we quickly settle into a rut. We find a way to do the tasks required of us in a manner that works and is safe, and we reproduce that method over and over again. Decades pass and we continue to use the tried and true methods without realizing that new learning or technology would enable us to work faster or potentially eliminate the task altogether through automation or some other method.

Invention is risky, and it can also be exhausting. We have to be constantly rethinking how we are doing everything that we do. We need to re-evaluate on a regular basis and try new solutions. I’m not advocating “change for the sake of change,” but there is something to be said for “thought for the sake of thought.”

I think we often perceive that suggesting untested ideas has the potential of negatively harming our reputation. If we suggest a new solution and it fails, then by extension we have failed. But that hasn’t been my experience. I have watched people fail to suggest and try new ideas, and they are not perceived as safe and stalwart employees. Conversely, I have watched people suggest new ideas that fail, but as they continue pushing into new territory, they eventually succeed; a day comes when one of their ideas is a breakthrough and improves the work that is being done. And those people who are suggesting, trying, failing, and eventually succeeding, they are viewed as innovative, hard working, and contributing to the organization.

The people stuck in a rut are left behind, and the organization moves forward. If it’s the organization that is stuck in a rut as a whole, either by being unwilling to approve the testing and application of new ideas or by not having anyone willing to risk, then the entire organization will be left behind by its competitors.

And we all have competitors. If you’re a business, you know this, but it applies to non-profits, clubs, and individuals as well. Other people are out there trying new things. If we’re not willing to try too, then we will be surpassed.

So think about what you do, and then think of a new way to do it. If you absolutely cannot come up with any new ideas, it’s time to talk with someone else. Several years ago, I was in charge of an orientation and training program for new staff. I had built it from the ground up and managed it for six years. It was more successful than having no orientation or training, which was the case before I started the program, but I could also tell that it wasn’t very successful. Staff were better trained, but they still weren’t meeting my expectations or goals. One night, while lying in bed trying to think of how I could improve the program, I realized that I was going back to the same methods that were failing me. I couldn’t think of anything new.

It was time to turn the program over to other people. I put together a team and gave them full ownership of the program so they would feel free to try whatever they could think of. They built on my work and surpassed every expectation. Their creativity and fresh perspective led to a very successful program that greatly increased retention of the training materials while making our staff happier.

Don’t be afraid to get outside help. And don’t be afraid to let go of what you have done in the past. There is always room for improvement, and if you have reached a point where you can’t think of any way to improve, seek outside help. This help can come from other members of your team, elsewhere in your organization, or from an outside consultant. What we can’t do is just accept our inability to innovate. We have to risk or we will be ruined.

2 thoughts on “Being risk adverse ruins us

  1. This is true, but it’s one side of a necessarily-two-sided coin. Whenever organizations or lifestyles veer too far towards risk-aversion or risky behavior, things get messy. Look at the financial industry, particularly regarding mortgages and securities, leading up to the 2008 crash. Lots of incentives for taking big risks and seeking huge rewards –> everybody gets screwed. Susan Cain has some good stuff on this in Quiet; it seems like introversion correlates pretty clearly with risk-aversion. It’s probably good for those of us on that end of the I-E spectrum to push ourselves from time to time, but there’s also value in risk-aversion… preserving tradition and memory, refining processes, getting by when times are tight… that works best in tandem with or taking turns with those pushing the envelope.

  2. I love the tone of this article. The reality is that a lot of people look at risk in a very binary way considering only the options that they deem as “not risky”. This is wrong (or at least naive) because by it’s nature risk is qualitative, but it’s also quantifiable to some degree, so it’s important that you consider this when making decisions.

    Most of what business is about is in reality selling or buying risk.

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