Spring Comes to Business: Risk Taking

groundhog, groundhog day, Punxutawney PhilYou can always tell when the economy is emerging from a recession. Sluggish and sleepy-eyed, like Punxsutawney Phil on February 2, it blinks in the pale light of new demand and decides that we might not have four more years of recession ahead after all. 

One by one, the signs of spring begin to appear, like snowdrops poking through the snow:
  • Jobs for marketing, human resources, and training are advertised.
  • Headhunters start reaching out to prospects.
  • Companies begin expanding, but cautiously.
  • Business publications print articles about executives urging their employees to take risks.
It’s as predictable as car sales in February or gasoline prices rising in the summer, but it’s still fun to watch. As Shakespeare’s Richard III (recently disinterred) said,
“Now is the winter of our discontent
Made glorious summer by this son of York;
And all the clouds that low’r’d upon our house
In the deep bosom of the ocean buried.”

Allergic to Risk

Our recessionary winter was long and difficult. We’re not sure that all the dark clouds have disappeared or that summer will be warm and glorious. But it’s spring and there’s hope.I’ll start by discussing one item on the list above: risk taking. Tomorrow’s post will address new hiring, especially for marketing positions.

This story by @LeslieKwoh appeared in today’s Wall Street Journal (@WSJ), “Memo to Staff: Take More Risks.” The article relates how Jim Donald, CEO of Extended Care America, “sensed fear” when he took the job a year ago. Sensed it?  You could probably smell it in the hallways. 

Ms. Kwoh continues, “Growth and innovation come from daring ideas and calculated gambles, but boldness is getting harder to come by at some companies. After years of high unemployment and scarred from rounds of company cost-cutting and layoffs, managers say their workers seem to have become allergic to risk.”
Actions have consequences and sometimes they are not the results intended.  You may have planned only to cut costs and hunker down for the long run but your people probably felt something entirely different. After all, if you beat a dog, it will cringe when you raise your hand. And don’t be surprised if it doesn’t bark when there’s a stranger at the door or rush to protect you from an intruder.

Permission to Make a Mistake

Get Out of Jail Free card, MonopolyTo encourage his employees to take risks, Mr. Donald has an excellent idea: he created “Get Out of Jail Free” cards that give his employees permission to make a mistake without negative consequences. It’s working.  The interesting thing is that some of the “risks” his troops took just sound like good ideas. The fact that they were seen as risks at all, illustrates the depth of the fear.

Then Ron Ashkenas, a senior partner at Schaffer Consulting, a management consulting firm that advises Fortune 500 companies, says,” A penchant for risk can get an employee flagged as a loose cannon or hard case for management. And, while companies may talk lovingly about experimentation, they’re often quick to deem someone a failure when results don’t come quickly.” 

Ya think?  I remember a CEO who demanded a guaranteed 10% return on a corporate visibility ad campaign. And then there’s the VP who told me that he only took risks when the results were “a sure thing.” I guess he was unclear on the concept of risk. 

While I applaud this sign of spring, I urge executives who want to motivate their teams to set a good example. Here’s a suggestion based on two posts of earlier this week about @SherylSandberg’s book, Lean In, Women, Work and the Will to Lead,:

Hey, all you male executives, why don’t you take a risk yourselves and hire more women into senior roles. That would sure tell the ranks you’re serious.