The Big Reason You Should Encourage Smart Risk-Taking

When was the last time you exhorted your staff to “go take some risks today?” How would you react if you heard a supervisor chiding an employee for “playing it too safe?” The truth is that risk-taking has become a bit of a hypocritical subject.

Taking calculated risks is part of business and part of leadership, yet most employers have indoctrinated their employees with the idea that all risk should be avoided at all costs. As an article from Forbes explains, when interviewed, the strongest and most consistent message from individuals in the business world was that people, at all levels, were “risk-averse” and “felt it more prudent to continue doing what they had always done.” Unfortunately, this is sending mixed messages to employees who are also being asked to do more with less and to step up as leaders in a constantly-changing business world, which is ultimately confusing workers and hurting employers.

Risk Empowers Employees
Going through the process of calculating the risks, taking chances, and learning from mistakes is how employees are empowered and leaders are made. In the 2012 Global Workforce Study, global professional services provider Towers Watson identified risk, strategic flexibility, and rapid decision making as three of the top nine competencies required in future leaders  So, as a team-building article from Inc. encourages, “don’t just talk employee empowerment – really do employee empowerment. By giving employees at every level of your organization decision-making authority…you will unleash a widespread desire on the part of employees to lead.”

Giving employees authority is a wonderful idea, but many business leaders find it easier said than done. “While executives genuinely want innovation, they simultaneously want to control costs and report consistent earnings,” explains Forbes. Lee Fiedler, retired president of Goodyear’s Kelly Springfield Tire Co. unit, agrees and knows first-hand how hard it can be to encourage risk-taking. “That’s the hardest thing to do because it means giving up control,” Fiedler told The Wall Street Journal. “But managers who try to tell employees what and how to do every little thing will end up with only mediocre people, because the talented ones won’t submit to control.”

Empowered Employees Grow Business
Learning how to be innovative and stay ahead of the competition has been a hot business topic over the past several years. But empowered employees are what link innovation to company success, and it’s those risk-taking, talented employees who are going to grow business. Inc. found that “when employees throughout a business become leaders, decisions are made more quickly, customers are happier, and tremendous amounts of time, energy, and money can be saved.” And Fiedler told The Wall Street Journal the same thing. “The more he encouraged his employees to take initiative and please themselves rather than him, the more the quality and productivity of their work improved.”

As you consider the pros and cons of giving your employees more control, you need to factor in this simple formula. Smart risk-taking produces empowered employees, who then produce business growth. After all, the goal of creating a successful company is why you took your risk in the first place.

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