If there’s one thing guaranteed to lighten the pallor of an executive’s face, it’s the suggestion of taking more risk.
Need more breakthrough innovation? Sure. What’s the catch? The clue is in the adjective: breakthrough innovation requires a degree of breakage en-route. That means taking risks that don’t always pay off.
It stands to reason: in a turbulent, uncertain and complex economic climate there are few ‘knowns’. New product development in particular has become a voyage into the unknown with companies using intelligent trial and error techniques such as Lean Start Up.
But in most cases, the perceived negative implications of a risk-gone-wrong stifles the very innovation that organisations so desperately need.
That makes Doug Sundheim’s Taking Smart Risks: How Sharp Leaders Win When Stakes Are High a timely and welcome guide for organisations that want to do just what the title says.
Five steps to smarter risk-taking
Doug gave me a sneak preview of the book before Christmas and I found it to be a rare and accessible blend of research, insight, wisdom and practical tools that deserves a place in every executive briefcase.
Taking Smart Risks offers readers five smooth stones to slay the ‘fear-giants’ that crush smart risk-taking in their organisations:
1. Find Something Worth Fighting For
- Something Worth Fighting For (SWFF) is what all smart risks have in common.
- It must be simple, stir emotion, lend itself to a story or narrative and inspire action.
2. See the Future Now
- Ask questions, understand concerns, test the concept behind your ideas, and predict as many fail points in advance as you can.
- Have an open, honest conversation with trusted people around you to determine what is the worst that could really happen.
3. Act Fast, Learn Fast
- Start before you know where to start, fail early, often, and smart – build learning into everything and stay humble.
- Accept that you have to live with failure – since it is an inevitable by-product of taking risks, even smart risks. Failing smart is the best way to learn.
4. Communicate Powerfully
- Expect communication to breakdown and plan accordingly.
- Share thought processes, meet regularly, and don’t avoid difficult conversations.
5. Create a Smart Risk Culture
- Define a smart failure – the acceptable boundaries within which it is okay to fail.
- Reward both the successes and these smart failures.
Every chapter ends with a clutch of useful tools to help readers de-risk risk-taking. If you’re short on time, just read the handy chapter summaries and start playing with the techniques that Sundheim suggests.
If you’re serious about innovation, growth or even plain survival, risk-taking is non-negotiable. Sundheim’s book doesn’t guarantee a failure-free future (what a relief as so much crucial learning happens when we fail!), but it will help leaders and managers in every organisation improve the quality of their risk taking.