Building propensity for risk
The rules of the game start changing at various points in our career.
The reasons could be manifold - role change, BU change, company change, technology change or an unpredictable event.
Whatever be the reason, the best way to continue our journey is to have cognisance of the fact that the rules have changed and work towards understanding what creates success in the new future.
For eg, when one starts his/her career, ‘execution excellence’ in one’s individual work is appreciated and rewarded. This is the zone of maximum control and lowest risk.
When one starts leading teams, the rules of the game change - now, one has responsibility of doing the best for themselves and their team. Credit is shared but brickbats are not.
Many feel a sense of loss of control at this point as they are unable to see anyone else’s work as “perfect” enough for them. The stakes have increased.
It does not stop there. A leader owning a BU / P&L has to take responsibility to “define” what needs to be done. In the previous roles he/she had the luxury of at-least being told what needs to be done and left to figure out the “how”. A mistake in direction here can lead to huge adverse impact.
An unpredictable event of high impact (also called the Black Swan) like the Covid situation also pulls the carpet beneath any leader’s feet. There are no play books and there is no end in sight. Decisions are made run-time as one progresses towards lowering the impact of the situation. Success can only be inferred retrospectively.
As you see the rules of the game continue changing as we rise up in our career. It starts with 'individual execution' to 'collective best' to 'defining vision' to 'agile mindset' and so on. An important point to observe in all these transitions is the degree of “risk” involved.
As we rise in the roles we play, our ability to take risks is expected to rise.
Some of the leaders I coach, share that they have received feedback about not seeing the large picture, or not having strategic outlook and hence they growth is stunted. When I probe further, most of the time, its not about strategic thinking, but rather an inability to take risk that stops them from growing after a point in their career.
While risk management is fairly a mature discipline and is taught, risk taking is not.
Nassim Nicholas Taleb in his book “Antifragile: Things that gain from disorder” talks about anti-fragility as the ability to thrive in disorder.
According to him,
‘Fragile’ is the ability to thrive in order.
‘Robust’ is the ability to sustain in disorder with resilience.
‘Anti-fragile’ is the ability to thrive and be better in disorder or when confronted with a stressor.
Building our “risk-taking ability” is a journey of uplifting ourselves from being fragile to anti-fragile.
It also means that through this journey we feel empowered to move from victim mindset (things are happening to me) to player mindset (I make a choice & things happen).
How would one start this journey?
Exposure - Most of the risk management theories place more emphasis on mitigating /avoiding risk. Some may gravitate towards accepting risk but no more than that. To build our ‘risk taking’ muscle, we need to place ourselves consciously in contexts that require us to face risk. Somewhat similar to the Barbell strategy of investing as Taleb states in his book, we need to look for situations where we need to take risks that have small losses if we fail but have a large potential upside if we succeed. This needs to be done deliberately. Instead of taking one more project/scope/role of the same kind, we need to think on what could be a stretch that may lift us up in our career. One of the prerequisites of this path is to be nonchalant on failures. The other is strategic thinking on how each piece adds up to the whole that makes our career.
2. Redundancy - Some of us have a meta-program (refer to this blog I wrote earlier) of prioritising “moving-away” than ‘moving toward”. For eg, we do not want to go to Delhi for vacation but we are not clear where we want to go. In the career context, what this means is we are so scared of not keeping our jobs/ life style we have that we cannot take steps to even think of taking risks. So the fear of losing what we have prevents us from creating backups/redundancy. However, unless redundancy is created, both our organisation and us become fragile. So one of first things one should do if we want to gravitate towards higher roles is to build redundancy.
3. Optionality -This is the ability to develop choice. Most of us look at our career as linear path. We also have one way of earning livelihood. As we know by experience, having one choice or an either-or choice limits and forces us to make decisions that don’t serve our interests. Building optionality in the way we look at career would mean - have multiple types of roles that one looks forward to, having expertise in multiple skills that don’t add up together, building an ability to have multiple sources of income etc.
4. Focus - People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. ~ Steve Jobs. What you say no to has a huge bearing on what you are able to say yes to, as it creates space.
What would be the one action you will do differently to take risks with your career?
What would help you to play well when rules change?