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Management

Faulty Risk-Taking: The Genesis of Unintended Consequences

by Dr. Linda Henman
written by Dr. Linda Henman

In December of 2014, Discovery Channel aired a special called “Eaten Alive.” The program featured Paul Rosolie, a “naturalist” who planned to don a snake-proof suit and live through getting swallowed by a 20-foot-long anaconda. Apparently, the goal was to provide Rosolie the insider (pun intended) perspective of a snake’s digestive processes.

Anacondas this size can easily eat a large mammal, like a deer, so swallowing a human shouldn’t have been a problem. But it was. Even though programmers at Discovery designed a suit that would protect him against the snake’s fangs, compression, and stomach acid, they couldn’t make Rosolie look appetizing to the giant frightened snake who didn’t want to eat something that looked more like the Tinman than his supper.

To overcome the first round of bad decisions that didn’t anticipate consequences, Rosolie decided to provoke the snake into eating him. That had the intended consequence of making the snake attack, but Rosolie didn’t anticipate how much he’d hate being constricted by an anaconda, so he called in the crew to rescue him.

The story doesn’t end there, however. The December 15th edition of People reported the Discovery Channel had filmed adventurer Rosolie being eaten alive by the snake on December 7th.  The magazine went to press too soon, as we now know. When the folks at People decided to report a story that hadn’t happened, apparently no one anticipated the embarrassment of a wrong headline.

Start to finish this story is chock-full of bad risk-taking. What can leaders learn from the mistakes of the snake-bait and the folks at the Discovery Channel?

  • Ask “What guaranteed good will come of this?”
  • Embrace optimism but never at the expense of pragmatism.
  • Explore worst-case scenarios.
  • Base risk-taking on facts, not guesswork and probabilities.
  • Gamble when the rewards outweighs the risks, not when you want the excitement of the unknown.

What if Rosolie hadn’t choked? The only way for him to have gotten out of the snake’s stomach would have been for the crew to kill the snake and cut him out. Though Rosolie and Discovery touted this stunt as a way to raise awareness about the Amazon and its biodiversity, we can all agree that didn’t happen. But a snake pit full of unintended consequences sure did.

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Leadership

Heroes Don’t Have Comfort Zones

by Dr. Linda Henman
written by Dr. Linda Henman

April 18, 2017 marked the 75th anniversary of the dramatic bombing of Japan that followed the attack on Pearl Harbor. On that day in 1942, at 8:20 in the morning, 16 B-25 bombers under the command of Jimmy Doolittle took off from the USS Hornet 750 miles from Japan.  In 1942, most experts found the notion of America—a county ill-prepared for any sort of warfare—making a direct assault on the Japanese superpower almost inconceivable. FDR disagreed.

Two weeks after Japan’s December 7th attack on Pearl Harbor, President Roosevelt asked the Chiefs of the Army, Navy, and Army Air Force to plan a retaliatory strike to boost American morale. Since the lion’s share of the US Pacific Fleet’s battleships lay on the bottom of Pearl Harbor, and American aircraft of that era could not reach Japan from the closest American base, the service Chiefs wondered how they could respond to the President’s request. Doolittle, a military test pilot and aeronautical engineer, figured out the answer.

When the group of volunteers first assembled, Doolittle informed them the mission would be highly secret, dangerous, important, and interesting—and some of them probably wouldn’t return. In spite of his candor, Doolittle didn’t lose a man, at least not then. On April 18th, eighty men, most of them scarcely out of their teens—but Doolittle in the middle of middle age—took off from a navy carrier in the Pacific.

One of the volunteers, Richard Cole, served as the co-pilot on Jimmy Doolittle’s plane. In 2010, I had the rare and exciting opportunity to interview Lt. Colonel Cole about the days leading up to the raid, his reaction to it, and Doolittle’s leadership.

Cole mentioned Doolittle had earned the title “Master of the calculated risk” far before FDR and others conceived of the raid because he consistently pushed the edge of the envelope. When I learn clients fear failure, I think of Doolittle and his Raiders. They had much to fear, yet they didn’t let dread stop them. When I asked Cole to describe the fear they all felt as they stood on the deck of the Hornet, realizing they wouldn’t have enough fuel to return, he said he didn’t feel scared and didn’t see signs that others did. Rather, they all focused on the objectives and the “job we had to do.”

Even before takeoff, the crews realized they would probably not reach their intended bases in China, leaving them the option either to bail out over eastern China or to crash land along the Chinese coast. Fifteen crews were forced to ditch along the coast or to bail out over eastern China. Most of the Raiders found their way to safety, but the Japanese Army captured eight of them and executed three as war criminals.

Doolittle thought the raid a complete failure, and he thought he would be court-martialed upon his return. He erred on all counts. The action bolstered US morale and slowed the Japanese offensive. Further, the raid led directly to what many historians now believe defined the turning point in the war against Japan. But it did something else: It demonstrated the value of embracing ambiguity and approaching threats with new thinking when conventional approaches won’t work.

The Doolittle Raid serves as a lesson for leaders about decision-making, innovative thinking, risk-taking, and overcoming obstacles to success. It also shows that successful leaders must be willing to accept innovative solutions to unprecedented problems. Only then can they create a culture that attracts people who willing to make tough calls.

Col. Doolittle wasn’t court-martialed.  Instead, his actions distinguished him as one of the first heroes of the war, won him the Medal of Honor, and positioned him to serve as a stellar example of leadership—a person who never thought of staying in or creating a comfort zone. On this anniversary, Col. Cole, at the age of 101, is the only living Doolittle Rader hero. We thank him and remember his fellow heroes.

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EntrepreneurshipLeadershipManagementSmall Business

Are You Tough Enough to Cross the Rubicon?

by Dr. Linda Henman
written by Dr. Linda Henman

During the Roman republic, the river Rubicon marked the boundary between the Roman province of Cisalpine Gaul to the north-east and Italy proper to the south. The river distinguished not only the geographic boundaries for the province but also the military restrictions for governors and magistrates. Therefore, rulers required generals to disband their armies before entering Italy, and if a general entered Italy while exercising command of an army, both the general and his soldiers became outlaws who automatically faced death.

In 49 B.C., Julius Caesar led a single legion south over the Rubicon from Cisalpine Gaul to Italy on his way to Rome. In doing so, he deliberately broke the law and made armed conflict inevitable. Historical accounts of the event depict an undecided Caesar approaching the river, as he uttered the famous phrase, “Alea iacta est (the die has been cast),” an act of insurrection and treason.

The phrase “crossing the Rubicon” has survived to refer to any individual or group committing itself irrevocably to a risky or revolutionary course of action—the point of no return. In organizations, crossing the Rubicon need not involve treason or even revolting behavior. Rather, it means making the decision to innovate, to depart radically from the status quo, or to take the risk you’ve been avoiding. Once the die has been cast, why do change initiatives still fail? For usually one of ten reasons:

  1. Most people in most organizations can’t recite the company’s mission statement, much less articulate an ideal future state for the organization.
  2. Leaders show a reluctance to make the tough calls that the change needs to happen and will happen.
  3. Leaders lose sight of the macro, concentrating too much on the micro—too much focus on tactics and activities and not enough on long-range goals.
  4. Leaders fail to serve either as champions of or agents for the change, communicating that they will comply, rather than commit, to the change.
  5. Too many people have an exaggerated concern for the disruptions that happen in the short run instead of optimism about future gains and rewards.
  6. People develop a propensity to fix things (problem solve), which only restores things to the status quo, ignoring innovative decision making.
  7. The focus turns inward, and people take their eyes off the customer.
  8. Managers hesitate to delegate specific areas of the change initiative to individuals, along with the authority and responsibility to make the requisite decisions.
  9. Leaders fail to hold people accountable for the results.
  10. Senior leaders have a misguided notion that they’ll know what will happen in five years, which can build either a false sense of security or dread among employees.

With the Gallic Wars concluded, the Senate ordered Caesar to step down from his military command and return to Rome. He refused. Instead, Caesar marked his defiance by crossing the Rubicon, illegally entering Roman Italy under arms, causing a civil war, and engendering a victory that put him in an unrivaled position of power and influence. While in power, he assumed control of the government, centralized the bureaucracy of the Republic, began programs of social and governmental reform, and created the Julian Calendar.

Boldness defined Caesar’s change initiatives and success, but so did the risk that ultimately led to his demise. Caesar teaches the value of crossing the Rubicon when we must but also in evaluating the risks for doing so. Fortunately for most business leaders, even rebellious employees won’t be allowed to assassinate those with whom the disagree—not even on the Ides of March.

 

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Self Governance

Men and Women in Business…..PC aside, what’s the real difference?

by Guest Writter
written by Guest Writter
Douglas Obey, Author, Money and the Human Condition

Living through the 1060’s and 1070’s would have convinced you that there were no difference between the sexes, but I think we have evolved since then. And while there are no absolutes between men in women in business or regarding finances there are plenty of generalities we can take a look at and how the genders differ in their views and perception of money, investments and business.

I’ve been a financial planner and investment advisor for over 30 years and it’s been my experience to note that women are typically more financially conservative than men. Men tend to be willing to accept more risk than women. This difference can be problematic for both, with men being seen as too reckless and women too cautious. So my first exploratory question here is why might this be the case?

Can the reason be found when we revert to yesteryear when women were dependent on men—the time in history when men handled all finances in the household as well as business matters, and there were few if any women in the workplace let alone corporate finance? Perhaps it’s a natural consequence from centuries of specific social behavior and acceptance. Why men and women respond differently with regard to money and finances might be interesting to ponder, but what is important is how this difference manifests itself and what each sex stands to learn from the other in the disclosure.

Let’s begin with men. Not only are men typically willing to take on more risk than women, but they also have a tendency for less due diligence prior to investing, perhaps because they feel if the investment is lost they could always sleep in a tent and start over—or maybe it’s for the same reason men don’t ask directions. Who knows? But it is best to understand as fully as possible the investments you’re making before parting with your hard-earned money.

Women, on the other hand, tend to take more time to understand what they are investing in. However, they too often let fear or lack of complete understanding prevent them from taking an otherwise acceptable level of risk needed to acquire an investment with a potentially higher return.

This difference between men and women is magnified in small businesses and could be part of the reason why many fail during the first year. So in an effort to clarify an understanding between the sexes as it relates to money, let me spend a little time on this topic.

When starting a business or new venture, it’s important to do your homework. Both a business plan and extensive research are essential with start-ups in order to overcome the odds of failing. However, once a man understands the concept of the business or venture, he’s more likely than a woman to invest his time and money without understanding every detail. The down side here is that missing a crucial detail can derail a new business early on. On the other hand, if a woman, in her typically more cautious approach, gets lost in all the details and the myriad of potential problems a new business can face, the trigger might never be pulled, resulting in an opportunity lost.

A study conducted by Terry Odean, a University of California professor, found that women outperformed men when investing in stocks by 1.4% to 4.6% (depending on the particular study). Odean concluded the reason for this difference in success is related to “overconfidence in men when pushing forward in their decision-making.” This coincides with my conclusion that men in general are willing to take greater risk than women without the prerequisite amount of due diligence.

To summarize, women should be careful not to overdo the analysis as this can lead to paralysis and men, on the other hand, should engage in a little more homework before finalizing the investment or business transaction.

Remember, regardless of what the PC crowd insists, men and women come to the decision-making table with inherent differences. Recognizing this will not only make you a better investor but also more successful in relationships, both business and personal.

[Image courtesy of Ambro at FreeDigitalPhotos.net]

About the Author

Doug Obey has over 30 years experience helping people as a financial planner and investment advisor and is the author of Money and the Human Condition. Obey is also a self-made, successful entrepreneur and business owner who has acted as CFO and advisor to many other business owners. Learn more about Obey at http://www.dougobey.com/

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EntrepreneurshipLeadership

Keys to Being Disruptive in the Digital Age

by Guest Writter
written by Guest Writter
Richard Hollis, Founder & CEO, Holonis Inc.

“The one who follows the crowd will usually get no further than the crowd. The one who walks alone, is likely to find himself in places no one has ever been.” – Albert Einstein

In today’s age of technology and the Internet, it is no longer enough to be status quo – you have to provide an impact of disruption and “virality” that surrounds your product and radically improve how things are done. Your customers need to experience the “wow” factor that makes them want to rave about your company and spread the word that elicits the “viral loop” across the internet (word of web). Whether it’s a car taxi service, an on-demand online streaming of movies and shows, or an application that tracks your health, the digital age has introduced us to great technology that has disrupted the way things were and improved our lives. As a CEO today I am often asked: What is the key to being disruptive? How were you able to build your company to where it is today? What advice do you have to offer to budding entrepreneurs and executives to become successful?

There are several components to becoming disruptive in the digital age that go beyond the product, service, or technology that you have to offer. My current company, Holonis, Inc., would not be the technology it is today without the essential building blocks that made it come to life. As an experienced and seasoned CEO with over 30 years of experience, I have learned many hard lessons and it all boils down to these core factors:

Taking a risk

The beginning of starting your own company or being a CEO that represents a brand is no trivial pursuit – it is a big responsibility that takes risk. Risk-taking can be a foolish gamble or it can be an educated and well-thought-out move. Today a CEO needs to be bold and be comfortable with ambiguity until the answers become available. Listening to feedback and making adjustments when markets are moving fast is mandatory. Speed wins and reduces risk. Taking the risk to create something innovative that can make a difference in the world, even if it means starting from scratch, requires a passion to create value. Sometimes you have to risk going into unfamiliar territory to discover paths and roads that only reveal themselves through action and the fortitude, persistence, and passion to deliver a disruptive technology.

Get with the right people

Acting on your vision and taking a risk is only as good as the team you build around you. Value creation through innovation utilizing technology takes smart, creative people with the skills and commitment to deliver a product. Therefore the most vital component of translating the vision into a reality is people, and recruiting the right people will determine the success or failure of the vision. They have to believe the vision is worth fighting for and they want to make a difference of contributing value to society.

Provide servant leadership

Behind every great vision and team is leadership. A leader must be the face of the company that people believe in and trust. As an executive of a team you must merit qualities of integrity, strength, authenticity, and the ability to bring out the best in others. Serving others to be the best they can be is servant leadership. With every company that I have been with, I have learned that without strong leadership, execution is next to impossible. Being a leader, you must inspire each individual to rise to the occasion, see their potential and understand their purpose in the company.

Execute your vision

Start bringing your passions to life and act on your vision. Vision, leadership, execution and committed people build great companies and cultures. This attracts talent that enables the best that is within them to be expressed in their work, contributing to the company’s vision and success. Through their hard work, dedication and continual iteration, a vision comes to life.

At Holonis, Inc., a company I founded over five years ago during the Great Recession, I was able to pivot my career into the digital realm with a vision to create the world’s first smarter marketplace of the internet following the above principles in this new era of disruptive technology. I believe that Holonis represents a new ecosystem that will empower business owners and consumers alike in this new digital age of the twenty first century.

As a CEO and entrepreneur, not only do you have to see the opportunity in the market – you have to seize it. Let your vision take form as you take that leap and watch the possibilities unfold for your company.

About the Author

In his current capacity, Richard Hollis is the founder and CEO of Holonis Inc., based in San Diego, California.  He used his unique blend and scope of experiences to build a talented group of young Internet thought leaders in 2010, each of whom have achieved individual successes and were eager to be among the architects of the next wave of Internet evolution. The team formulated a vision of creating the first fully integrated social media business platform. Holonis thereby empowers businesses of all sizes with integrated technology that is fun, easy, and cost effective to use, the goal in mind is to catapult and reboot the economy for all users into the forefront of the rapidly evolving digital revolution.

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Self Governance

Why Don’t We Forget How to Ride Bikes?

by Dr. Linda Henman
written by Dr. Linda Henman
Probably everyone reading this article can ride a bike. In my neighborhood riding a bike was a rite of passage, a means of transportation, and a symbol of freedom. People from all walks of life and economic backgrounds know how to ride bikes. You might call it a universal success story of learning. And once you know how to ride a bike, you never forget.
What explains the success of this nearly universal skill acquisition? And what can these answers teach us about other kinds of learning?
1. We start out expecting to fall and don’t allow fear to crush our hopes.
How often in business do we hesitate to take a risk, even when the rewards make themselves apparent?  Because we fear failure?  The loss of face? Rejection?
2. When we fell, we got up and got right back on that same bike.
No one had to teach us goal-setting, role clarity, or accountability. We knew what we had to do and realized no one else could do this for us. Our knees, and no one else’s, would be the ones to smart if we fell. We persisted in the face of adversity and learned something with every new attempt. We sought success, not perfection. We never blamed the bike nor insisted that the bike change. No one had to teach us a “can do” attitude. We believed in ourselves and didn’t seek approval; we sought success—the objective arbiter.
3. We got feedback from a trusted advisor who knew how to ride.
4. We didn’t question that person’s motive; we just listened and adjusted.
Imagine the changes we could make if we sought mentors and trusted advisors in our professional lives and found someone who could teach us the organizational equivalent to bike-riding.
5. Kids felt an obligation to teach other kids the skill.
I learned to ride on my girlfriend’s bike. Janet lent it to me and even recruited her own father to help me since mine was out of town on the critical launch day. We met our self-imposed deadline, even though I had neither my own equipment nor parent involved.
6. Once we mastered the art, we developed muscle memory and unconscious competence—the ability to do something without thinking about it.
Each day we execute countless skills because of muscle or mental memory. We don’t need an instruction manual to brush our teeth, make coffee, or take a shower. If we did, we’d never get out of the house. How many similar skills do we fail to master in our professional lives—skills that would streamline our lives and reduce our labor intensity?
Once mastered, bike-riding skills opened the doors for other possibilities. Learning to ride fast, take the turns, and balance others on your handle bars immediately followed the initial skill acquisition. No one developed an action plan or accountability chart. We knew what had to be done and did it every day it didn’t rain.
Even if you haven’t ridden in decades, every person reading this believes he or she could get on a bike right now and ride successfully. We have no fear of failure because we don’t expect any. Want to create a culture that is characterized by learning and innovation? I have a feeling you already know how.
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Strategy

The Risky Business of Not Taking Risks

by Dr. Linda Henman
written by Dr. Linda Henman

In my work, I frequently engage in a broad-based leadership development program to prepare top talent for advancement. That was the case when I recently worked with a large construction company to groom Mike, one of the presidents, and Joe, the lead risk officer, for advancement.

During the 360 peer interviews I asked Mike how Joe could improve in general and how he could specifically help Mike with his growth objectives. Without hesitation, Mike answered, “I need for Joe to take me right to the edge of the cliff without letting me fall over. Right now he’s serving as the business-prevention arm of the business.”

I don’t think I’ve ever heard a better definition of what those in risk and compliance can do to support the organization. Take them as far as ethics and good sense will allow without letting them hurt themselves or the company, but don’t serve as the business prevention unit.

Theoretically, this sounds not only easy but also profitable. So why don’t more companies embrace Mike’s strategy? Fear. Most companies cut the edge of the cliff a wide berth, taking great pains to stay away from it. That’s the safe way; it keeps individuals from getting into trouble; and it protects the company from all things nefarious.

It also protects the company from growth and profit. Ordinary companies take few risks, preferring to stick with the status quo until overwhelming evidence surfaces that they should change. They want to outrun the competition but see no sense in making decisions that would create a huge gap between them and the next in line.  Decision-makers value steadiness over innovation and caution over risk. And they settle for ordinary.

It all starts with the right people making the decisions. When evaluating your company’s Risk Aversion Quotient (RAQ), start by assessing the people closest to the decisions. In this case, it was Joe. Ask yourself these five questions:

  1. When making recommendations, can this person go beyond the numbers to see patterns and anticipate consequences?
  2. Does this person understand how to separate “what” from “how”?
  3. Can this person keep a global perspective?
  4. Are priorities apparent to this person?
  5. When facing a complicated or unfamiliar problem, can this individual get to the core of the issue and immediately begin to formulate possible solutions?

Fortunately for Mike and the construction company, we could answer “yes” to all these questions about Joe. When Joe received the feedback about how others needed his guidance, he was able to offer advice, using his exceptional analytical reasoning abilities.

The company has doubled in size since my work with Mike and Joe. They have taken some risks during a time when their competition has hunkered down, and it has paid off. This company hired exceptional people in Mike and Joe and then steadfastly developed them until both were ready to move forward, proving once again that risky business decisions—provided they’re the right decisions—will position your for success.

 

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LeadershipSelf Governance

Why Seemingly Smart and Respected Leaders Indulge in Self-destructive Behavior: How It Can Be Prevented?

by Guest Writter
written by Guest Writter
Steven Mundahl

Arnold Schwarzenegger, Anthony Weiner and General David Petraeus all share something in common. They were all intelligent leaders who indulged in self-destructive, risky behavior. As I began writing a book on authentic leadership, I found myself drawn to research the reasons behind such actions. Together with my wife, a psychotherapist and business coach, we discovered that Americans leaders have NOT lost their collective willpower or hit an all-time ethics low.

We did find that leaders need to be more knowledgeable about their genetics and the science of the brain as well as healing past negative traumas. We can view the leadership vehicle as a high-powered race car that leaders need to master.

1st The Engine:  Genetics: Risk-Taking Runs in our Leadership Veins

The powerful “risk-taking” engine under the hood can literally backfire. One married leader who was referred for help in a high-risk affair said, “Risk-taking runs in my blood. I have a big capacity for it. I know my board could fire me. I could lose the very company I started!” The risk-taking speedometer runs up to 200+ mph for some leaders. (Think racing at Daytona).

My Neurotransmitter Made Me Do It! All of us get a dopamine rush with new challenges. This is our own evolutionary inner “APP” which rewards us for finding new territories/inventions and sex partners to ensure survival of the species.   Leaders are often HIGH sensation seekers chasing intense, novel and complex sensations. Tests have shown high pleasure seekers to have a hyperactive dopamine neurotransmitter in the brain’s reward and pleasure center. This kind of dopamine-wired leader is getting more bang for his dopamine buck. The anticipation of this intense reward, “the honey” overwhelms the concern for the stinging bees. It is easy to miscalculate how quickly small repeated risks mount up.  You get away with it a few times and– Bam! You’re “outed”.

Men have a Powerful Testosterone Additive in the Gas: Men have a “fight or flight” response to stress increasing their testosterone which leads to impulsive behavior. This reduces the effects of the calming oxytocin. The enzyme monoamine oxidase (MAO) needed for self-regulation is found to be low in high sensation seekers. Conversely, MAO is found to be higher in women.   Psychologist Shelley E. Taylor says women “tend and befriend” during stress. The hormone oxytocin released during stress supercharges their estrogen for a calming effect.

Advice:  Take a Risk Behavior test. It is short and simple. (I have one on my website.) If you score “high”, you may have an overactive dopamine reward system or low MAO. You may need extra help to fuel up your willpower self!

2nd The Car Navigation System : Your Brain:

The Brain’s Hedonic Adaptation describes the pleasure and excitement of something new wearing off.  If your relationship seems a bit stale don’t turn to an affair: you are experiencing a normal leveling off after about two years’ time. (Remember only 25% of affairs succeed longterm).

Advice:  Get an “intimacy tune-up” with a counselor. Learn new skills in communicating your needs and creating excitement.  Don’t feel trapped or settle for mediocrity: Boredom and a poor sex life lead to extreme vulnerability for affairs.

Stress Lowers Brain Willpower:  With stress, your brain does an “amygdala hijack” You’ll react impulsively without your wise prefrontal cortex to help you.  Your car might as well be out in the desert with no satellite system.

Advice: Get a good stress reduction routine. APPs which help to monitor stress are springing up all over.  Breathing (imagine 6 counts in and out), mindfulness meditation and routine fitness reduces stress.

3rd The Car Body: The Dents from Trauma:

None of us escaped some family dysfunction. It left us with emotional triggers or even compulsive addictions (Sandusky) which can lead to risky behavior.

Advice:  Know thyself. Heal thyself.  If you have repeat emotional triggers, get help from a psychotherapist to desensitize them and heal any negative beliefs. They’re often linked to an earlier traumatic event in your life.

In summary, we wrote our comprehensive book for self-mastery so that leaders will be equipped to take their race car down the leadership road—to enjoy the power yet knowing when to use the speed control to keep it on the higher road—while listening to Michael Jackson’s, “Gonna make a difference, Gonna make it right. I’m starting with the man in the mirror”.

About the Authors

Steven Mundahl is CEO of Goodwill Industries in Springfield, Ma. He teaches leadership in the graduate program at Baypath College. Steven Mundahl and Sharon Massoth have written a new book called The Alchemy of Authentic Leadership (2013), which offers tools and strategies to help leaders avoid scandal, be more effective, and heal themselves and their companies. Steve has also written several other books: “Living the Goodwill Burn,” “100 Years of Goodwill,” “Driven to Succeed,” “There is Power in Belief,” and others.

Sharon Massoth is a psychotherapist and teacher of “Intuition as Daily Practice for Success” at the New York Open Center and other educational sites. She empowers leaders to live authentic lives.

More information is available at www.alchemyofauthenticleadership.com.

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LeadershipSelf Governance

Risk Taking and Leadership in Business

by Guest Writter
written by Guest Writter
Emma Sinclair

What are the skills, tendencies and inclinations that separate a good business person from a true leader? My short answer? An appetite for risk.

I IPO-d my company at 29, the youngest person in the United Kingdom to have done so. I often wonder what it is about me that gave me the confidence to contemplate doing that; the innocence of youth not explanation enough for the path I decided to tread.

I quit my job, raised money and floated a vehicle on the stock exchange with no track record, a tight personal budget and as a result of my age, a distinct lack of experience (albeit partially countered by boundless stamina and a deep, longstanding love of the stock market). Yes I had watched other people do it having worked in mergers and acquisitions but I am neither reckless nor arrogant (I hope others would agree!) so where did the skills to lead a team and building that company come from?

Firstly, humility is always important so I know my view on this is entirely subjective and I shouldn’t wish anyone to think my successes or any views I have curated on leadership have come without encountering challenges and making mistakes. It’s simply not the case and I never believe anyone who paints a rosy picture of plain sailing and profit making without admitting the glitches.

Secondly, I believe leadership is impossible without passion and integrity. People follow people. You can’t lead if no one is behind you – and whilst confidence and credibility are essential, it’s easier to lead when those traits are matched with heart and drive.

Which leads me to my third point. The dreaded R word: Risk. Taking risks is imperative. Without it, there is no reward – and I think comfort and acceptance with this is one of, if not the defining characteristic, of a leader.

I am often stunned at how risk is misconstrued and perceived as being the other dreaded R word: Reckless. When the unexpected occurs, a leader instinctively knows how to react. Gut instinct – and trusting that gut instinct– is crucial. Leadership requires ingenuity, the ability to look at things differently and an acceptance that rigidity and always ‘sticking to a plan’ stifles opportunity.

An aversion to this and an inclination to always study historic performance as a means of assessing the future dulls innovation. Without risk, where is the platform for growth, where is the entrepreneurialism and creative thinking?

Fourth and finally, the quality of a network doesn’t create a leader but I’ve never known a leader who hasn’t naturally built an enviable collection of peers. Often cited as the number one unwritten rule of success of business, networks must consist of people both within and outside of a company, sector, social circle and demographic.

I despair of people who think that only mingling in circles of people they already know – people who look like them, went to the same college or are members of the same club – will create a meaningful and powerful set of connections.

Never ignore the value of social networking. Whether it is LinkedIn.com, EnterpriseJungle.com or Twitter.com – or all of the above – they all have their place and provide access and leverage. Networking that does not replace old fashioned conversation – but better facilitates. Join them. Clever technology and intelligent connections often smooth the path to a critical physical interaction.

Work has to be about your passion – not your pension. About growing – not stagnating. About innovation – not insulation. So I counsel people to recognise that when required, risk thrills, excites and drives every leader I know – and whoever that leader is leading. And risk is not – contrary to popular belief – a dirty word. As is often said, if you always do what you’ve always done, you’ll always get what you’ve always got. And that, in my books, isn’t good enough.

About the Author

Emma Sinclair is a serial entrepreneur and the youngest person in the UK to take a company public on the stock exchange, having done so at 29. An ex-investment banker and recipient of multiple business awards, she has a diverse portfolio of interests. She founded Target Parking, a car park operator and facilities management service provider.  A mentor within the start-up community, she has a tech start up of her own having co-founded EnterpriseJungle, a social application that helps individuals become more successful and organisations more agile. Intuitively and proactively connecting people whose current projects, industries, location, influence, and aspirations align, EnterpriseJungle helps build effective and meaningful relationships that drive more efficient business results and introduces users to people they should already know.

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About Nick Vaidya 

The Host Of The CEO Show at The CEO Magazine. A serial entrepreneur, whose previous roles include managing a multi-billion dollar product line profitability for Dell and an Executive with Razorfish. Nick’s work is influenced by his doctoral research in empiricism, a wide variety of business roles, and the study of the ancient wisdom of the Vedanta.

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