Analyzing and evaluating the consequences of risks are all fundamental to understanding risk as a critical leadership competency. This activity takes the leader step-by-step through a practical process.
- To capture participants in a dynamic discussion about the kinds and levels of risk.
- To identify each participant’s risk profile.
- Creating awareness that a risky situation for one person might be easy for another.
- To explore the different ways women and men each approach and handle risk.
- Attached document Risk Evaluation
- Prepared index cards for Step 1: Risk-Taking Scenarios
Arrange tables in a square with chairs outside so that participants can see one another during the discussions. If possible, place two people at each table so they will already be arranged when you need them in pairs.
Being able to take risks and evaluating whether the consequences are worth the risk is an essential leadership skill. In business, we face a lot of different kinds of risks and these experiences tell us that many risks can be mitigated or made less difficult and less dangerous. The areas covered in this activity are designed to invigorate thinking and opening up a dialogue as to what risks are most appropriate in specific work circumstances.
If your time is limited, you can remove some sections of the activity; it is carefully divided to accommodate that. In Step 2, you can prepare a flipchart sheet ahead of time so you have some of the answers ready to share. An additional way to deepen the response to this activity is to ask the participants to come to the training with an example of business risk, for use in Step 7.
Step by Step Instructions
- Introduce the topic of risk-taking by setting up the scenario. Use the Risk-Taking Scenarios document attached. Write-on index cards, one card for each step. Ask participants if they would walk on a tightrope stretched between the 18th floor of two tall buildings so as to raise one million dollars for the charity of your choice? (Use an example of tall buildings in your own city and discuss responses.)
What if the money was to go to them personally? (Gather response.)
What if there was a safety net below the tightrope on the ground level below? (Gather response.)
In addition to the safety net what if the tightrope was actually a 6-inch wide wooden plank? (Gather response.)
If (in addition to the safety net and the 6-inch wooden plank) a harness was also attached so you would only fall several feet before the harness stopped you, would you take the risk for 1 million? (Gather response.)
What if in addition to all of the above, one of the flying Instructors held your hand during your walk? (Elicit response.)
Conclude by saying, “These are all different levels of risks. I will ask you to think about whether or not some risks look more do-able if changes can be made, that is the nature of risks. If you don’t take it, you will never feel the natural high you get from its successful conclusion!”
- Ask participants what they understand from the word risk? Write answers on the flipchart.
Possible answers might include:
– Risk is taking action despite the likelihood that there will be consequences of your decision or behavior.
– Doing something that has an uncertain outcome, is taking a risk.
– Some risks are big, others are small.
– Some risks bring reward and recognition, while others lead to failure and frustration.
– Risks can be positive or negative.
– All risk types have at least one thing in common: They teach you about yourself and what you need to succeed in life/work, and that is very important if you want to move up.
Give the following questions for discussion:
What is the relation between risk relate and your comfort zone?
How can we expand our risk potential?
Why don’t we take more risks?
Ensure that participants make these points:
People aren’t comfortable taking them.
They fear failure.
They can’t take the first step.
Others might resent their decisions.
- Distribute Risk Evaluation document attached. Next talk about the notion of high-level, mid-level, and low-level risk. Ask participants to write an example of a risk they’ve taken (at each level) on the handout. Do explain that you are mainly focusing on business risks – a time when they stood up for something they felt really strongly about. Participant’s motivation might have been to protect or defend themselves, another person, a belief they hold dearly, or the organization itself.
When you stand up for something, you are taking a risk—often a personal risk, whether it plays out physically, financially, or emotionally. Note: Risks are only taken when something powerful compels them. When participants have completed all 13 questions, ask volunteers to share any special strategies they used. Then ask, what are the benefits of risk-taking are Gather responses such as these:
– You learn to set stretch goals.
– Goal-setting helps people solve problems, instead of placing blame.
– Goal-setting means careful planning; this contributes to taking risks confidently.
– When you set goals, you are able to improve on previous accomplishments.
– You explore new opportunities.
– You learn more about yourself.
– Your success with the risk improves your self-confidence and determination.
- Explain what is probably obvious to everyone that people perceive risks differently.
Discuss these areas of difference:
– One-person thinks it is risky to drive; another thinks it is riskier to fly.
– Some people are not afraid to go rock climbing or skiing.
– People have different attitudes about investing money.
- Tell participants that there are some risks each of us wants to take, but something holds us back. This is what we will focus on next. Divide the group into pairs and distribute Handout 44.2, A Risk Evaluation Plan. Ask each pair to work through the questions on the handout after they each identify something they want to do. (One person talks and the second takes notes.) After 10 minutes, tell them to reverse roles for another ten minutes.
Then direct pairs to ask of one another: What are you afraid of in terms of taking this action, and how can you overcome these fears?
How can you use your knowledge and past experiences to deal with this risk?
What kinds of risks can you handle best?
Is there any preparation that you can take that will make it less risky?
What additional strategies can overcome barriers to achieving the desired results?
How can we, in this small group, be both a support group and a brainstorming group for risk? And why would this be helpful?
- Discuss with the total group how men and women have different attitudes toward risk-taking.
Tell the group: Many women say that they are not particularly comfortable taking risks. However, men say that taking the risk and standing up for something you really believe in is incredibly powerful and energizing. If you are well-prepared to argue for what you believe in—and if you don’t totally lose control and you can keep the issue from getting personal—you will be respected for the confrontation. Remember, men might be “programmed” to expect and take risks, but everyone should understand that business is business. It is NOT personal! A man or woman who is not willing to take some risk will be at a career disadvantage. Many HR professionals say that the barriers to risk-taking in women are frequently internal, rather than external. Women find themselves taking criticism personally. Men and women should speak up in meetings if they have something worth saying. There might be some social discomfort (risk) in doing so, but it can be overcome.
Did you ever hear of the Imposter Syndromes? Some people do not evaluate themselves objectively; they are afraid that someone will really find out that they are not as bright or as competent or as . . . (you fill it in). This might surprise you, but some people in top positions still wonder exactly what they are doing and how they got there.
“If you are approached to take on a new project or position, think seriously about taking it. You wouldn’t have been offered the project if someone didn’t think you could handle it.” Then continue: “Mind you, I am not suggesting that you throw caution to the wind. Being ambitious does not mean taking big risks. It means setting a stretch aspiration, and then using the tools and resources to de-risk that ambition.”
What does a stretch aspiration look like for you?
What is the level of risk, after you de-risk it?
“You can learn to take more risks by getting more adept at evaluating them. Many companies equate innovation and growth with risk-taking. Certainly, calculated risks must be taken, but getting to the future first is not simply a matter of having more risk-takers. Getting to the future first is less about making heroic investments than it is about de-risking heroic ambitions.”
- Close the activity by telling participants that they should try it out since they have a plan for taking a risk. Call your partner to let him/her know how it went. Then try to meet again to review the questions on the handout. Be one another’s support system. And good luck!”
Soon after conducting this activity take time to reflect on how it went, how engaged the participants were, and what questions they raised. Make notes that include how much time you actually spent on the activity.