Managing Risk

 

“With great risk comes great reward” -Thomas Jefferson

In all we do, we assume some risk of danger, loss, harm or failure. Taking calculated risks is a way to get to a great reward, but there is a tipping point when the reward is not worth the risk. The difficult part is that the tipping point sits somewhere on the other side of a massive grey area that is unique to all of us and determined by personal tolerance, knowledge and external pressures.

The photo sequence above shows a rafting group (me included) getting blasted with Class IV whitewater, putting us at some risk of loss, injury or worse. This may make some people excited to try it, while others look at that and think it is crazy. This gray area of risk is where failures can occur or where greatness can be achieved.

It’s important to examine the risks we take, in our personal lives or with the organizations we lead, by the risk/reward balance AND by examining how we can mitigate the risks. On our rafting trip, we mitigated the risk by wearing floatation devices, discussing safety and emergency protocols prior to our departure, practicing the techniques of rowing, partnering with trustworthy people and by enlisting the leadership of an experienced guide. By eliminating some factors, our risk could decrease significantly, and conversely, there is probably even more we could have done to mitigate the risk, like wearing helmets.

As with organizational and personal risk taking, there are things we can do to mitigate these risks, if we are willing to take the time to problem-solve these factors and implement mitigating solutions. This is one of the few times when a leader should take a negative approach and consider all the things that can go wrong. With this information, you can then build your upon your tools and plans for mitigating these risks. Taking the time to evaluate the factors that reduce risk, allows you to pursue opportunities of GREAT RISK without proportionally greater risk of failure. You can extend further, safer. Then GREAT REWARD becomes achievable!

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