Do your employees choose to avoid risk or embrace it?
If it’s the former, then this could be for several reasons. It may be that they are unclear on the risks you want them to take and avoid. They could feel like they don’t have enough support from you and other leaders. Or, they may be afraid of what will happen if a risk results in a failure.
It’s important to understand why taking a calculated risk under the right circumstances by your employees can be beneficial to their career growth, and your retention of talent. This article explains the importance of fostering a workplace culture that encourages taking measured risks through employee motivation and shares steps you can take to create an environment that fundamentally supports your employees taking calculated risks towards a positive outcome.
Why should companies take measured risks?
Whether your business is large or small, local or global, B2B or B2C, taking risks is important. Big businesses such as Facebook, Google, Apple, Virgin and many others have not got to where they are today by avoiding risks. They have taken many large risks, challenged the status quo and moved forward even through failure. Mark Zuckerberg has even been quoted saying, “The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks."
Risks can improve business growth, help to improve processes, ensure you stay innovative and much more. But risk-taking can also help support the individual career growth of your employees such as providing learning and development opportunities:
1. Improved growth
Encouraging employees to take risks can help drive faster business growth. Whilst this can mean higher profits, it also creates an exciting, fast-paced business that keeps employees interested and engaged. This can also lead to continued learning and development opportunities for employees too.
2. Improved processes
A calculated risk can help employees discover new and improved ways of working. This can not only lead to reduced costs and improved productivity but helps employees feel empowered in their roles.
3. Stay innovative
Encouraging risk-taking can lead to an increase in innovation which can help your business stand out in a crowded marketplace. Employees will be able to take ownership of new innovations, which can help in their personal career growth.
4. Stay competitive
The business market is constantly changing and without taking risks, you may find yourself rapidly falling behind your competitors. It’s important to support employees in developing their skills so they can seek out new opportunities and take more positive risks, to ensure the business remains competitive.
5. Job satisfaction
9 ways to encourage a culture of calculated risks
There are many ways you can foster a workplace culture that supports calculated risks amongst employees. Here are nine steps you can follow to help get started:
1. Lead by example
To create a culture of measured risk-taking, senior leadership teams must give their full buy-in. You also need to set a good example by challenging the status quo and showing that you’re willing to take measured, smart risks yourself.
2. Define a smart risk
You do not want employees taking reckless risks that can jeopardise your business. To avoid this, make sure you define what a “smart risk” is and explain the impacts their risks can have on the business. This helps to create parameters for employees to work between, so they understand the procedures, where they can take risks and where risks should be avoided.
3. Spread the message
A workplace culture isn’t changed overnight. Make sure you regularly encourage employees to take risks and experiment. You could hold weekly meetings, for example, where you encourage employees throughout the organisation to put forward new ideas.
4. Create a safe environment for risk-taking
Create an environment where employees feel trusted and know they won’t be judged or punished if they fail. Instead of focussing on the failure, support and encourage employees to learn from their experiences. This not only encourages risk-taking to continue but their learnings can help ensure risks are more successful in the future. This can also help to develop their career prospects.
5. Reward risk-takers
Offer praise and promotions to those employees who have been brave enough to take calculated risks, even if the risk didn’t pay off. Other employees will see this and are more likely to take risks themselves in the future.
6. Identify risk-takers in your business
Some people may be more comfortable taking risks than others. Focus on encouraging these employees to take risks. They will act as mentors, encouraging others to take smart risks too.
7. Recruit born-to-be risk-takers
Risk-taking behaviour can be learned, but it’s not something that everyone will feel comfortable doing. It’s therefore important to keep this in mind during your recruitment process so you hire people who are willing and able to take smart risks for your business going forward.
8. Start small and build up
Rather than instantly expecting employees to take big risks, start small. Once employees feel trusted and able to handle these smaller risks, they will feel more comfortable handling much larger risks.
9. Set “creative time”
Encourage employees to take time from their standard workday where they come up with new ideas, or brainstorm ideas with others.
Fostering a workplace culture that supports calculated risks not only provides business benefits, but can help support the individual career growth of your staff, and eventually your ability to retain top talent.