Risk Taking; Smart Leader’s Practice

Over the years, the leaders have been defined as the role models, the influencers, the charismatic ones and numerous others characteristics that define that a leader is a perfect human beings and is always aware of what is happening and what needs to happen.

How Smart Leaders Take Risks

As intimidating as it may sound to be a leader, it is one of the most difficult roles a person could play. Great roles come with greater responsibilities which means greater stress. One of the most daunting task a leader is required to play is risk taking.

A smart leader beside other conventional leadership qualities is also a risk taker. There are leaders like Jeff Wiener, the CEO of LinkedIn, due to his courageous decision to make the company public, it became one of the most used social media platform in the world.

Risk Management

Risk taking requires courage and most leaders, being humans, avoid risk yet try to make an impact and become beneficial for the company. Seth Godin addresses the importance to taking risks in today’s business world, saying, “Playing it safe and not taking a risk is probably the most dangerous thing you could do in today’s rapidly changing and highly competitive business environment.”

As Seth Godin puts it, today’s business world is highly competitive and every business today requires innovation to survive and it is said that “Innovation is the cross between fear and bravery”. Meaning that, without the courage to take risks, break the barriers and thinking outside the box innovation is not possible. Hence, to make innovation a possibility, risk management has become an actual job. There are numerous examples of expert Risk-managers in the business world today to learn from. For example; Dr. Demetrios Zamboglou, in the past, he had been a risk manager, risk analyst and business strategist. His fearless decision making and innovative thinking led him to become the Chief Business Developer Officer at Lykke AG-one of the fastest emerging financial technology company.

Decision Making with Consequences

Many business advisors and writers suggest that deciding not to take risks is totally fine. It is true that leaders hold the power to decide whether to take risks or not but ideally, to bring innovation to something, whether it be a product, service, business functions or leadership style, it involves risk. However, the best way for the Leaders to not feel insecure about the risks is to think differently.

Think this way, making decisions is the primary job of a leader and looking closely, it can be identified that risk taking is actually more like making hard decisions but with consequences.

The only difference between failure and risk is the fact that when you fail, you are not prepared for the consequences. However, with risks you are aware of the consequences and chances of failure can be minimized. Therefore, taking risks is not that daunting after all, if anything it is the easier way out of the failure. Even so, if the name of ‘Risk’ gives frightens you, you can always call it, ‘Decision making with consequences’ or simply ‘thinking outside the box’.

Fear of Failures and Losses

Fear is the biggest obstacle in the life of a human being. Being a leader does not make you immune to fear. However, psychologists suggest that the fear lies solely in the brain and is only related to the chemicals in the brain. Many leaders are fearless and attempt to make decisions that are not approved by others, it does not mean that chemicals do not react in their brain at the mention of the word ‘Risk’. However, these phenomenal leaders or risk managers like; Tim Cook, Bob Igor, Reed Hashtings and Jack Ma are aware of the fact that letting some irrational thoughts and fears take over the rational thinking is equivalent to saying goodbye to logical decision making, innovation and success.