In our series about Strategy we now come to the question of Risk, but not the type of Risk that management consultants and others usually talk about.
We’re not talking about external risks like competitors, but our fundamental attitude towards taking risks, and how the wrong attitude can turn a Strategic Plan into a Roadmap to nowhere.
Taking risks is heralded in the leadership industry as the path of courage, that thing which separates the everyday from the entrepreneur.
Unfortunately, like true courage in real life, risk taking in Organisational Strategic Plans is quite rare.
Why is that?
The answer is hidden in plain sight. Aversion to risk is such an instinctive human behavior that we don’t realize we suffer from it. Avoidance of risk is normal, even sensible, but it has to be managed – Balanced – to achieve success.
In BalancedKaizen we reduce risk aversion by deciding to adopt Trial. We do this by being sensitive to Trial’s prime enemy – Comfort.
Comfort here has nothing to do with what you sit on, or eat. Comfort is a state of mind.
It’s the things you’re so certain about that you don’t need to debate them, you certainly don’t want to be challenged on them. It’s where many people put political or religious views. It’s where you put all the unchallengeable “truth” in your life.
There’s a battle going on inside everybody’s head all the time. That battle is between the desire for comfort and appetite for risk. It’s not a moral battle between good and bad, it’s a battle between doing what’s easy and what’s hard.
Stories about working hard exist for a reason. Hard work needs encouragement and Leadership to achieve results. Changing track is hard work because it requires courage to endure the cost of the mistakes which will inevitably come.
Good leaders accept discomfort, and mistakes, for long term gain and make sure their Strategy reflect them.
What’s comfortable is what you just know is right. What you know is right can be dangerous because when you know something is “right” you don’t look for other answers.
”Changing track is hard work because it requires courage to endure the cost of mistakes…”
As a leader you must be careful when you decide you “know” the answer. When you choose to ignore any other answer, you’ve also stopped progress.
There are 2 things you need to keep in Balance to ensure your Strategy promotes Trial, not Comfort.
Both are counter to how many leaders approach the creation of Strategy – which is why they are so important to understand.
1. Target Focus
A Strategic Plan that focuses too much on targets is one that tries to avoid Risks. It does so by avoiding evaluation of whether the targets can be achieved. “Just do it” is a good marketing slogan but not a good way to frame a Strategy.
The irony here is that this is not a courageous approach but a cowardly one. If leaders setting long term strategies aren’t brave enough to consider that they might fail, how can they expect others to have the courage to carry them out?
2. Too Prescriptive
When we pretend we know all the answers, we are pretending that our Strategy is like Ikea instructions, a perfect Plan to be followed rather than an outcome to be achieved. This maybe ok for instructions to build furniture, but totally wrong for a Strategic Plan.
Focus on too much detail at Strategy stage can be a substitute for the tricky job of alignment and engagement with those who have to execute.
Diving into details early is a form of Comfort.
A plan which suits a problem solving culture has to consider that many problems are yet to be solved!
Your job as a leader includes setting Strategy that will help and challenge your people to solve problems you don’t yet know the answers to.
If you’re sure of the outcomes you’re setting in your Strategy, you’re either ignoring what will go wrong or not aiming high enough.
Does your Strategy read like a roadmap, or an explorer’s brief?
Have you left some unknowns? Some gaps for your team to discover?
It’s not bureaucracy that hampers large companies. It’s people afraid to make decisions.
Image Credits: chilloutpoint.com ikea.com