The Risk Taker: 5 Steps to Managing Risk as an Innovator

The Risk Taker: 5 Steps to Managing Risk as an Innovator

Gloria’s rise within the company was simply amazing. Just a few years ago she was like any other engineer. Everything began to change when she decided to be more involved and began coming up with innovative solutions to complex problems. There was a lot of risk involved—she was putting her reputation on the line—but she managed that risk well, knowing it was worth it.

Taking risks is an important part of being a leader, and managing risk is the difference between an innovative and non-innovative one. Today, it’s the innovative leaders that are the main drivers of growth and value to employees, customers, and shareholders. Even if you’re not a director or executive, it’s still more important than ever to develop these skills.

5 Steps to Innovating while Managing Risk

  1. Focus your initiatives
  2. Identify the main risks involved
  3. Gather only essential information
  4. Avoid over thinking decisions
  5. Execute your plan decisively

Focus is the process of eliminating distractions and fine tuning your initiatives. Simply put, you want to filter down your innovative ideas into actual opportunities for your team. You need to go one step further too, by figuring out what you can implement immediately. Innovative leaders move rapidly, and by doing so, minimize the risk involved with long-shot projects. If you’re too broad from the start, chances are you’ll be adding on a lot more unmanageable risk.

Now that you have some key opportunities, it’s important to identify the main risks involved. Part of creating a strategic plan is to document risks and plan for them accordingly. Allowing your team to understand the risks early on will help all of you manage it better. You’ll be able to think about alternative ideas and approaches that may involve potentially less risk. Dig deep for these risks, they can be related to time, money, or even things that aren’t so transactional such as goodwill or enthusiasm.

Gathering only essential information allows you to avoid falling into rabbit holes that delay decision-making. You don’t have to have the answer to every problem, because as an innovative leader, you’ll be learning and adapting throughout the process. In software engineering terms, you want to follow the agile methodology as much as possible here. This means to set yourself up to start quickly and pivot just as fast when needed. Chances are, you’ll only learn some things once you begin the project, so you’ll be throwing away a lot of your preconceptions along the way.

Most of the dirty work is done now, but you still need to avoid over thinking your final decision. You have everything you need. You’re focused, you know your initiative, you know the risks, and you have all the essential information. So what’s stopping you from saying yes or no? A common pitfall at this point is not wanting to make the call. What’ll end up happening, though, is that you’re idea—and all that hard work!—might no longer be relevant because you took too long. Trust the process and the fact that you now know how to manage risk. Set a time limit for yourself so that the procrastinator in you gets into action.

If your project plan looks good and the level of risk is acceptable, as an innovative leader, it’s time to be decisive and begin executing on your decision. You should be able to convey a high level of confidence at this point, knowing that although your idea is risky, you’ve properly accounted for managing that risk.

You might think that this only applies to people at the very top of organizations, but these steps are practical for every manager, team lead, and individual. Anyone can be an innovative leader. In fact, many times it’s people at the bottom of organizations that begin their meteoric career growth by being innovative.

Try these steps out the next time your tasked with making a plan or coming up with a solution. I find this not only useful at work, but also in my day-to-day life where managing risk is even more relevant. For further reading, I recommend The 5 Skills That Innovative Leaders Have in Common by the Harvard Business Review. It expands further on the topic of being an innovative leader.

Credit: Feature image by Freepik

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