One thing inherent in leadership is risk. And how leaders view and handle risk has everything to do with how successful they are.
But there’s a common mistake most leaders make when confronted with risk. They think the goal is to either minimize it or eliminate it when, in fact, the goal is to harness it. Because risk is something you can never avoid, and when properly understood it is actually a powerful force to drive an organization forward.
Think about it. Putting a man on the moon was one of the riskiest things ever attempted in human history, but look at the huge number of technological breakthroughs that came as a result.
The decision that seems safest may in fact be the most dangerous of all as it takes the value risk has to offer and conceals it…
So how do you harness risk? It’s really quite simple, but it takes courage and wisdom.
- When faced with a situation, you need to determine the ratio of gain to cost. In other words, what will you gain if you decide to do XYZ compared to the cost of not doing XYZ?
- You need to determine what is really at risk should you move forward. This means having a clear understanding of what the total loss would be should your decision end up failing. But this also means an honest assessment of what is at stake should you not move forward.
Playing it safe in the short term seemed safest, but by avoiding and not harnessing risk, they actually made a much more dangerous decision.
Now, let’s get honest: What decisions have you backed away from to “play it safe”? We’ve all done it. Just remember, what seems like the safest course may just end up being the costliest.
For nearly 40 years, Rick has helped nonprofit organizations exceed their fundraising goals and increase their impact. Since founding Dunham+Company in 2002, he’s served organizations around the world creating fully integrated fundraising and marketing strategies. He is also a well-respected voice on issues surrounding charitable organizations.