As humans, we are wired to fear uncertainty: When we think about taking risks, we start to sweat, our heartbeat increases—our innate fight or flight stress response kicks in. At work, this fear can hold us back on an individual and organizational level. But without risk, there is no opportunity. There is no innovation. There is no growth.
Think of it this way: In organizational cultures where people feel unable or afraid to take risks, it has them playing not to lose instead of playing to win.
However, the ability to take intelligent risks has proven benefits to teams and organizations. It drives innovation and creative thinking, it opens up new opportunities, allows people to develop new skills, leads to higher engagement and job satisfaction, and builds team trust.
The key is to understand that risk isn’t something to fear. It’s something to manage.
As a manager or team leader, getting teams to see the potential of taking intelligent risks and the downsides of inaction is critical.
3 Steps to Intelligent Risk-Taking
Intelligent risk-taking is not a static quality; it’s a behavior, and behaviors can be encouraged and improved upon with the proper support. Whether you’re a people or project manager, you can give your team the courage they need to step outside of their comfort zone and towards success by following this three-step process:
1. Define: Set Clear Parameters and Establish Boundaries as a Team
Before encouraging your team to start taking intelligent risks, you have to clearly establish what makes a risk worth taking. This can be done by defining boundaries.
It may seem counterintuitive, but when decisions are being made with imperfect or incomplete information, we tend to play it safe and assume the harshest bounds for ourselves. Intentionally and publicly defining the parameters ahead of time takes some of the sting out of uncertainty, which empowers your team to exercise the full extent of their freedom within that limit.
2. Develop: Create the Conditions Necessary for Curiosity to Flourish
Innovation is fueled by curiosity—which is why it’s imperative to develop a culture of curiosity if you want your team to embrace intelligent risks. Research shows that when our curiosity is triggered, we’re more likely to seek out new information, come up with out-of-the-box ideas, and adapt to uncertain circumstances. The result? Fewer decision-making errors, more idea generation, and a performance boost that can reverberate through your entire organization. In order for curiosity to flourish within a team or organization, managers must foster a sense of psychological safety: The feeling that it’s okay to be oneself, take risks, and make mistakes.
3. Do: Make a Considered Decision and Take Action
Once you’ve defined what makes a risk worth taking and developed the conditions for curiosity to take root, there’s only one thing left to do: Take action.
Risk-taking is a behavior—which means it’s something you and your team can get better at with practice. As a manager, it’s especially important that you lead by example and model the risk-taking behavior you want to see in your team.
Our brains are bad at evaluating uncertainty, so we tend to miscalculate the potential harm of risk and minimize the potential benefits. To work around this cognitive block, you must carefully consider the pros and cons of all your options. Challenge yourself and each member of your team to take one small risk a week until you feel comfortable. Start with low-stakes risks, such as making an unexpected request, attending a networking event, or volunteering for a task that falls outside of your comfort zone.
The old adage still holds true: With risk comes great reward. Our greatest innovators have taken some of the largest leaps. With these techniques in intelligent risk-taking, we can enable ourselves and our teams to strategically take action in the face of uncertainty.