In a study of 20,000 people, German scientists found a correlation between height and backbone. When it comes to risk, taller people are bolder.
Every day we encourage people to “stand tall” regardless of their vertical measure. Risks are a normal part of work and life. The tough question is: what risk and when. Inevitably, the associated fears and transition are part of leading change.
In 2011, plenty of CEOs and senior managers took risks and will ride out the implications. For example:
- Microsoft spent $8B to buy Skype
- Kraft split in two
- AOL bet $315M to acquire the Huffington Post
- Walmart raised prices and added “mini-stores”
In the nonprofit sector, well managed organizations take risks and cite specific results. The Global Alliance for Vaccines and Immunizations (GAVI) is one example. They have 12 goal-level indicators against a five year strategy. By noting them publicly, the staff and governance take considerable risk, provide transparency and display accountability. Not long ago, United Way of America publicly named specific social benefit targets with a deadline, e.g., fewer high school drop outs.
Risk & Perspective
Risk is relative. So, a financial adviser has some, but it’s different than a construction worker, soldier or commercial fisherman. Everyone can name a job that they think is riskier than their own. This is good because it provides perspective.
David Ropeik is a Harvard instructor and author of How Risky Is It, Really? He writes about the brain and risk assessment. According to Ropeik just 22 milliseconds after you have “registered” trouble your cortex starts reasoning through the situation. Then, other regions of the brain send signals that begin determining solutions. Activity in emotional centers means a greater willingness for risk, while activity in cognitive reasoning yields more conservative decisions. This is good evidence for employing far more than an emotional response when facing an important decision.
Inaction Has Cost
When tackling risk, cite your challenge and its remedy. Then, list your upside gains and the potential losses. It is important to be concrete and clear. It’s even better to discuss your thinking with others to check for blind spots and bias. Be sure to profile the opportunity cost – it’s the “price” of inaction.
While some choices have incremental influence, others can reset your organization’s entire trajectory.Although people didn’t buy much during the Great Depression, from 1929 to 1933, refrigerator sales went up 30%. Refrigerators were a highly innovative product. The industry was willing to hire people, invest in research, development and marketing. This savvy (and risky) move was a game-changer.
How tall are you?
No matter your height you do have a backbone. Remember, not taking action can be very risky. Nothing ventured is almost always nothing gained.
-Lisa Wyatt, Ed. D. is chief strategy officer and partner in Phillip Wyatt Knowlton, Inc. PWK is a performance management resource for systems change with clients worldwide. Lisa has cross-sector and international experience. She is an author and W.K. Kellogg Leadership Fellow. See : www.pwkinc.com