Leading via Innovative Risk Management

Leading via innovative risk management does not mean closing your eyes and taking a leap. Bravery (or stupidity) has nothing to do with it. It means taking steps to heighten your sense of control, and reduce the “unknowns”, then risk is no longer even a consideration. When you are in control and unafraid you don’t have to take risks. You get to make decisions instead.

Here’s the leading via innovative risk management process:

1. Play worst first. I know it’s a cliche, but always start with, “What’s the worst that could happen?” Most of our risk based fears are groundless.

Say you leave your job and start a restaurant. What’s the worst that can happen? Your family could wind up homeless, destitute, and scattered? Not likely. You’ll work hard and adapt and adjust and if necessary close the restaurant and get another job before you let that happen. Failing is not an ideal outcome, but it is a manageable outcome. (Besides, since the shelf life of the average executive is a handful of years, you’ll probably lose your job soon anyway so what are you really risking?) Decide the most likely “worst” things that can happen and create a plan to deal with those outcomes before you start your new venture. Then you gain even more control and face even fewer unknowns.

2. Start really small. Think the odds of creating a menu, finding a location, hiring and managing staff — all the stuff involved in running a successful restaurant — seem like too much of a risk to take on? No problem. Create a few dishes and try them out on friends. Get a part-time job as a server, a cook, or a host. Follow around a friend who runs her own business so you can learn what owners do behind the scenes. Each learning experience eliminates another unknown and builds greater confidence.

3. Take a small plunge. Eventually practice is not enough to make perfect. Still, you don’t need to go all in — in fact you shouldn’t. Taking a small plunge is not only safer in terms of risk, it helps you avoid entering the freak-out, brain freeze, oh-my-gosh-what-have-I-done snap decision zone. Cater a small event. Cater a picnic. Provide food for a fundraiser. Do it at cost. What’s the worst that can happen? The event will be a disaster. Fine. You’ll still learn something… and what harm was really done?

4. Then get a friend. While by now you’ll feel ready — and you will be — you can take one more step to reduce any lingering risk based fears: Get some backup. Ask a friend to participate. Reel in a relative. Finding a willing helper is easy; everyone wants to try new things. You get a sounding board, an extra pair of hands if a “worst” does pop up, and most importantly the reassurance of knowing you are not alone.

5. Decide. Can you do it? Should you do it? Do you have the skills and willingness and motivation? By this stage you will know.

What process do you use to manage risk? What lessons have you learned about turning risk into reward?