By Jon Isaacson
Risk management belongs at the leadership table but cannot be the boot that keeps the wheels of growth from turning, rather it must be a component of the decision making process while we continue driving down the road of progress.
On the road of opportunities there is always risk. Where there is no risk there is no growth. When we discuss risk, often the underlying or unspoken component an organization is facing is the fear of the unknown. When risk is substituted for fear, the decision making process will stall out with inactivity that will result in missed opportunities. Risk management is a broad and misunderstood (or misapplied) discipline, there are three risks factors that every organization and individual should concern themselves with as they are the primary vision killers for driven entities. Those three vision and growth killers are – risk of failure, exposure and/or success. When a team assesses risk and establishes plans for mitigation of risk they are engaging in productive discussions, conversely if we substitute risk for fear those same conversation become even more dangerous than the risks we are trying to avoid.
Risk of failure.
There is always risk of failure, but fear of failure should never be the deciding factor when engaging an opportunity for growth. Failure is a reality. As a risk factor fear is a speed bump that causes evaluation, but failure by itself is not final unless it is allowed to be. Failure is a part of the growth process that causes smart organizations to learn while they weave through obstacles in the pursuit of vision expansion. When fear of failure immobilizes there is a psychological term for this, atychiphobia which translates as morbid fear of failure or the unfortunate. A fork in the road should be a call to identify risk, resource options and develop creative solutions rather than pull the emergency break to freeze all momentum. Positive results are not guaranteed, but all adventures will lead an organization to learn from the process whether the results were achieved as intended or through adaptation. A vehicle in motion is easier to steer than a vehicle that stays on the lot. Whether for fear of failure or as a protective measure, inaction is often the greatest risk as it will certainly lead to a negative result.
Risk of exposure.
When an organization or individuals have driven past the speed bumps that are laid out by the fear of failure the next level of detractions are those that arise as points of exposure on the road of action. Exposure is a reality. Fear of exposure is nonsensical when it leads to sheltering rather than exploring. A vehicle on the lot may be safer than a vehicle in motion but the sedentary vehicle will eventually deteriorate in place resulting in the same death without the experience of reaching its potential. Opportunities like vehicles were meant to be driven not to live a sheltered life wondering what if. Fear of exposure leading to inaction is a greater risk than exposure itself for businesses and individuals. Risk management is an important factor in growth, but the assignment is not to keep all the cars safe and sound in the garage, rather proper application leads an organization to keep as many cars running safely and with purpose as possible.
Risk of success.
Some won't want to admit it, but if psychology has identified a phobia for failure there is a yin to that yang in the fear of success which holds many frozen in reaching their potential. This fear of achieving a goal is often on the unconscious level but is so prevalent in life and business that the term many have coined is achievemephobia. Abraham Maslow is credited with referring to this symptom as The Jonah Complex which refers to the prophet in the Old Testament who successfully assisted the city of Nineveh to turn themselves around but pouted about the result and thus did not experience joy or realize his full potential. There are those who allow fear to prevent them from engaging in the hunt and there are those who are in the hunt but are afraid of losing that thrill or of what they will do if they reach their destination. What do we do if it works? Teams need diverse skill sets in developing resources that can identify opportunities, pursue growth as well as those that can manage the positive and negative consequences of those activities as the process unfolds. Risk management is intertwined in the growth process as the road twists and turns. So, how does an organization or individual incorporate risk into their vision and growth planning?
The basics of risk
1) Assessment - what the is the opportunity and what are the potential risks in relationship to the pursuit of that opportunity? A simple formula for calculating risk is to start with the end, by this an organization or individual will calculate the worst case scenario and then from there determine whether the potential reward is worth the effort. If the parties involved can survive the worst case scenario, then effort should be made to pursue the opportunity while being mindful of the risks.
2) Planning - once it is determined that the worst case scenario is survive-able, the fear of risk is effectively nullified and it's time to compose a plan that will enable pursuit of the opportunity. Planning would include identification of hazards, hazard mitigation and response parameters related to action steps. Smart operations are not oblivious to risk nor do they sweep them under the rug, they make them visible and work for progress without allowing fear to deter them from the goal.
3) Action - much is made of risk, but as was previously mentioned fear of failure and/or fear of success may be the biggest underlying obstacles to personal as well as professional growth. The homework has been done, the map has been laid out to the best of everyone's abilities, it's time to get the wheels of opportunity moving. Action may lead to unexpected forks in the road but inaction will only lead to the eventually demise of having a fork stuck in your operation.
Risk management is not meant to curb all activities and put a boot on the engine of opportunity. Risk management should be a process in the decision leading to opportunity identification, growth mapping and the celebration of a job well done. Risk management is essential because growth is essential and there is no growth without some level of risk. Risk does not stop the engine, it guides the vehicle safely through the obstacle course of growth and vision.
Jon Isaacson is the director for Local Facilities Manager's Connection (LFMC-localfacilities.com) which is a peer-to-peer networking group started in Eugene, Oregon. Jon has been working in business development, systems optimization and team building with organizations large and small for nearly 15 years. He has been writing, speaking and assisting teams with creative business solutions, helping those organizations bring their vision into reality.
Jon Isaacson / IZ Ventures - Creative business solutions. We help you connect, collaborate & conquer. #MTWSL
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