Thursday, January 11, 2007

84. Take risk, but have Plan B

Leadership programs often endorse "risk-taking" as an endearing leadership quality. Risk-taking is seemingly encouraged as a perquisite for greatness, an eminence nestled between character, passion and charisma. Robert F. Kennedy said, "Only those who dare to fail greatly can ever achieve greatly," or, if you prefer the poetic verse, Shakespeare wrote in The Tragedy of Julius Caesar, "There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures."

There are numerous leadership qualities, but I find "risk-taking" nearly as interesting, though easier to define, as charisma. While on the surface its definition may seem obvious, the initiative is actually a multi-layered enigma which often leaves one conflicted. There are many considerations, including the corporate pressure to "think outside-the-box." However, despite its leadership and corporate endorsement, risk-taking is often an excruciating and tentative deliberation as one ponders though possible scenarios.

Most of us would define the current corporate atmosphere as tumultuous- that is, embattled in uncertainty at nearly every fork in the road. The status of our employment is a weary consideration, one that fluctuates with each quarterly earnings reports or legislative decision. This uncertainly often breeds caution and a conservative approach to taking chances with one's career.

Warren Buffet spoke about risk-taking, and noted that he really does not take much of a risk, considering his financial standing. Too often people are encouraged, by those that are fortunate enough to become successful, to take risks and live their dreams- that anything is possible if you want it bad enough. I think this is true enough, but I also believe in a backup plan. I think there should be alternatives planned in case things don't work out- which in the case of high-profile careers - rarely does. It was Buffet who also said that he hates the phrase, "a self-made man." As he puts it, no one is a self-made man, everyone got a break somewhere along the way.

In fact, a 2004 report entitled, "I Didn't Do It Alone: Society's Contribution to Individual Wealth and Success," spotlights successful entrepreneurs and concludes that the myth of self-made success is destructive to the social and economic infrastructure that fosters wealth creation. Some quotes from successful entrepreneurs include:

"I personally think that society is responsible for a very significant percentage of what I've earned." -Warren Buffett, CEO of Berkshire Hathaway

"Lots of people who are smart and work hard and play by the rules don't have a fraction of what I have. I realize I don't have my wealth because I'm so brilliant. Luck has a lot to do with it." -Eric Schmidt, CEO of Google, Inc.

"I know a lot of people who believe their success is only due to their hard work, their ingenuity... They say, 'I made it, it's mine and I'm going to hold onto it.'... My response it that a lot of factors go into building a successful business. For instance, did they go to a public high school or a tax-supported college? A lot of folks forget the help they got... We take it for granted." -David Lewis, founder of AirGas

I think people should take risks, but that they should be calculated risks- and perhaps early or late in one's career when there is less to lose. Early in one's career, a failure is much easier to overcome, and can even be chalked up to that valuable employment characteristic- experience. Houses will not be foreclosed, children will not go hungry. However, once these responsibilities become part of one's life, the stakes are raised. With plant closings, layoffs and downsizing, employment is risky enough, and there is less incentive to add additional stress to the situation.

Similarly, late in one's career, risk is leveraged against savings and achievements. Once someone is financially secure, he or she can afford to risk the balance.

I think risk-taking is a valuable characteristic to have, but that it should be measured with reality- consisting of hard work, research, consideration, and, perhaps, most importantly, the realization that luck and good fortunate may play a decisive role in whether or not an endeavor is successful. Luck and good fortune are not a very attractive leadership quality, and consequently its role is often undermined. Of course, the theory might just be that the more chances one takes, the better the odds that he or she will get lucky.

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