Why understanding propensity for risk may help leaders

Image by WOKANDAPIX from Pixabay

When did you last take a risk at work? Were you even aware you were taking a risk? Or perhaps you were aware that you didn’t take a course of action because of the risks?

A recent study explored some factors that influence our attitudes towards risk and it got me thinking about how that might be useful to be aware of as leaders. It also got me thinking about times in my career when I had taken risks and what the outcomes had been. I share below some reflections for leaders related to being aware of their own risk appetite but also of those that work for them in their teams.

The article in the latest copy of the CIPD’s work magazine shares the results of a study investigating the role that loss aversion and optimism play in our attitudes towards risk. Interestingly, women are generally less optimistic than men and, when anticipating negative outcomes, women tend to ‘report more intense fear and nervousness than men’. In addition, women are more pessimistic than men in regard to their future earnings and less confident in their abilities.

How might an appreciation of this help you as a leader?

Recognise that while women may be generally less optimistic and feel stronger emotions when anticipating negative outcomes, this does not need to define the choices that female leaders make. Female leaders that I coach often talk about not being confident. Lots of us have moments where we feel less confident.. quite possibly because we are being less optimistic about potential outcomes.

Here are 3 tips to help women where this applies:

1. It’s important to remember that doesn’t define us – rather than making it part of our identity (I’m not confident’) we benefit from being more specific and using the word ‘feel’ – e.g. ‘I don’t feel confident in this situation’.
   
2. If you recognize yourself here as a female leader, it is also worth bringing front of mind any potential negative outcomes you are anticipating and holding them up to the light – how likely are they to happen .. really? What might an equally plausible positive outcome be?
   
3. Finally, as Susan Jeffers encourages us in her book of the same name.. it is worth telling yourself to ‘feel the fear and do it anyway’. If we can accept fear as simply a fact of life rather than a barrier to success and recognise that a key way to get rid of the fear of doing something is to go out and do it, we’ll keep growing rather than staying in an ever decreasing comfort zone.

Image by Gerd Altmann from Pixabay

In my 30s, I took a risk that changed my future career path, I believe for the better … I applied for a Head of HR role in an small company that had never had an HR role before … and, while I had some relevant transferable skills,  I did this with no HR qualifications coming from a role in IT. I got the role and studied on day release for my HR qualification, putting into place what I learned as I went. It took a career transition coach to help me overcome my fears about what could go wrong in order to go after what could go right.

Whether male or female, the three tips above are useful for us to consider when supporting female leaders in our teams with their development when they may be holding back from doing something that would develop them.

And, for any decisions that we may need to make, it shows another reason why gender diversity can help to get a broader view of all the considerations – it may need a more optimistic read of a situation to see possibilities but equally, having an alternative view that sees what might be at stake can enable caution where needed.