Mention the word “risk” to an entrepreneur and images of danger immediately surface in their brain. To most taking a risk has a negative connotation, but it shouldn’t. Risk-taking is actually an essential part of the learning process for leaders.
It is your responsibility as a leader to assess risks with sound judgment, and take a chance on the ones that have the power to propel you or your company to the next level. “Without trial and error — and risk taking — you remain stagnant, predictable and, ultimately, you will become complacent,” says Business Strategist and Huffington Post Contributor Megan Tull.
Here are three reasons you aren’t taking enough risks and three ways to combat them.
Reason #1: You Are Afraid
Perhaps the most common reason leaders opt for the safe route is fear. They are afraid of failing, appearing foolish, or losing everything. It’s difficult to place your livelihood on the line for something that may or not pay off in the end.
Fix It: Start small. It’s that simple. You don’t have to take a huge risk just because it’s the next one that comes along. Ease into risk-taking and the assessment process by choosing something that will have less of an impact if it fails, but still makes a small improvement to the company if it succeeds.
Reason #2: Things Are Going Well
Why change up your business ventures if they seem to be maintaining a certain level of success? Well, because maintenance and growth are two entirely separate concepts. If you are content to keep your business exactly the way it is as culture and communities evolve around it then sure, there’s no need to push the envelope. If you want to grow alongside the culture and community, you’re going to have to take some risks.
Fix It: Keep your mind open to new ideas. Just because things are going well now, doesn’t mean they can’t get better. Do not hold on to outdated processes, procedures, or policies because you’re feeling sentimental. Approach each conversation with a mindset that is amenable to new thoughts and impervious to old biases.
Reason #3: You Are Uninformed
Leaders do not have to take every risky opportunity that comes their way. Instead, they should pick and choose the ones that are right for the company. Deciding which risks are right for the company involves some level of research and analysis. You cannot make a decision if you have not received education on the subject.
Fix It: Do your research. Do not immediately veto an idea because the first thought that popped into your head was negative. Devote an adequate amount of time to thinking things over. Yes, you may assess the negatives, but spend some time brainstorming possible positives. They may have the potential to overrule or even eliminate that original negative consequence. Just make sure you don’t spend too much time in the analysis phase, or you might induce fear.
Risk-taking does not have to be a scary, off-limits subject. Take small steps to improve your risk analysis skills, and utilize them to decide which risks have the potential to benefit your company.