Investors readily agree that risk determines their eventual gain. They know they must invest large sums of money to expect large returns, and they understand that the chance of loss determines potential profit.
Leaders do not necessarily embrace that view. They often avoid risky situations in search of stability or security. However, as with investment, it is important for leaders to consider the risks they take in making decisions.
They cannot be truly successful unless they go into unknown territory. Failing and learning from mistakes provides experience and perspective.
I was reminded of this aspect of leadership as I read a very thought-provoking and informative book called Taking Smart Risks by Doug Sundheim. Mr. Sundheim argues that the "vicious cycle of playing it safe" limits opportunities and outcomes. He asserts that smart risk takers learn how to embrace risk. They recognize that without the possibility of failure, they cannot really be successful.
Passion, which he calls Something Worth Fighting For (SWFF), is at the heart of the ability to take risks. Once individuals decide what is worth fighting for, they ask themselves if they can live with an outcome that is less than they hoped.
With my focus on Affective Leadership,sm the ability to connect with others and build a better future, I wondered about risk tolerance and risk aversion in terms of relationships and the ability to lead. While the outcomes may be very different, I decided that some of the premises are the same.
- Leaders must invest tremendous energy and emotional capital in relationships to expect significant returns.
- The more they put into building relationships, the more they can hope to gain...or stand to lose.
- Leaders must take risks in discussing uncomfortable topics to strengthen relationships and minimize threats to them.
- They must extend their capital (trust) to expect trust and collaboration in return.
- Too much risk in a relationship threatens and may eventually destroy it.
- Learning from failure in relationships can make relationships stronger.
- Complacency and desire for security often lead to stagnation and dissatisfaction.
- The passion for people (SWFF) is at the heart of successful and productive relationships.
I realize that some relationships are simply too valuable to risk and that certain types of risk are foolhardy. That is where the important step of finding SWFF comes in. I also see that the risks in relationships are most often risks to one's own sense of well-being rather than actions that could jeopardize a relationship.
However, just as effective and productive leaders understand and consider risk in the decisions they make, Affective Leaders recognize and extend themselves in building and maintaining relationships. They constantly monitor relationships and consider the effects of all actions and decisions they make on those relationships. They consider think of them as risks.
How do you believe leaders should view risks and relationships? What is too much risk? Is any risk to relationship too much?