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Kelly Odell

- A blog for leaders
28 Apr 2007

4. You have to risk your job in order to do your job! Losing your job is not the worst thing that can happen! (It can often be the best!)

Far too many people seem to think that the worst thing that can happen to them in working life is losing their job, especially, losing their job as a direct result of their own actions. The embarrassment of failure and/or the eventual threat of economic insecurity resulting from unemployment tend to limit our willingness, indeed maybe even our capacity to be creative and take risks. But risk taking is exactly what we have been hired to do.

The higher the risk, the higher the return! This premise is one of the fundamentals of economics. Despite this I have often heard people say things like “we need to minimize risk” or “we need to eliminate risk”. From the perspective of economic theory minimizing or eliminating risk is the same as minimizing or eliminating profitability. In any healthy company the direct opposite of this should be true; we should encourage our people to take risks.

I don’t know how many times I have seen looks of panic on the faces of various managers when I say things like this. I can almost hear them saying “What if an employee takes a risk that bankrupts the company?” When I talk about risk I am not talking about jumping out of an airplane without a parachute or playing Russian roulette with a loaded gun. These activities are not risky they are stupid. Risk taking should be the result of intelligent fact-based decisions making full use of our skills and knowledge while pushing the frontier of our competence. Risk taking is not foolish squandering of resources or wild guesses!

Companies in highly competitive industries will fail in the long-term if they cannot develop a culture that encourages risk-taking. The same is true of the individual careers of all employees in these companies! My own theory is that the greater your responsibility in the company, the greater risks you must be willing to take to succeed. Unfortunately, there often seems to be a reverse correlation between seniority in the organization and willingness to take risks.

There are many more jobs in the world for people who make $50,000 a year than there are for people who make $2,000,000 a year. It would not be strange if someone who has a $2,000,000 job were inclined to do whatever possible to keep it. They might also be inclined to avoid anything that might jeopardize their positions!

Risk avoidance will lead to failure in achieving results and ultimately to losing your job. Risk-taking over the long-term will lead to growth and profitability, however, on the short-term a risk that doesn’t work out well could also lead to losing that cosy high-paying job. If you do the math at an individual level you could come to the conclusion that you are likely to end up getting fired no matter what you do. If you play it safe and maybe offset declining profitability and lose of market share with cost-cutting initiatives you might just be able to prolong your employment longer than if you take risks. I am not saying that there are never scenarios where you should play it safe or that cost-cutting for that matter is always wrong. I am saying that these initiatives can and sometimes are misused by managers for there own benefit to the detriment of the company!

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