Tame your worries and energize your life.
—Dale Carnegie
In this chapter we will explore ways you can assess risks, how you can turn away from poor choices, and how you can embrace those that have a real chance of paying off. We’ll also look at practical techniques to make you more comfortable with risk-taking, because as a leader you should not lie awake nights worrying. You should enjoy the challenges that come with success. Finally we’ll discuss how you can exercise leadership in helping others deal with risks and the setbacks that sometimes accompany it.
No one can achieve anything—certainly not leadership mastery—by consistently and exclusively focusing attention on what can go wrong. A lot of things can go wrong, but most aren’t as harmful as worrying about them.
Freeman Dyson (b. 1923) is one of the most honored and accomplished physicists of his generation. Along with his work on topics such as quantum field theory and nuclear engineering, Dyson has also been fascinated by such down-to-earth topics as the physics of bicycles. He has pointed out that successful bicycle design only came by trial and error and that designing a theoretical model for bicycle operation would be a huge challenge. “It’s very difficult to understand just why a bicycle works,” Dyson has said. In fact, if we started to think about it too closely, we might never be able to ride around the block. But effective leaders don’t get caught up in thinking about why things can’t work. They know there’s a risk factor in everything. They realize that there’s a certain amount of faith and mystery even in mundane activities like bicycle riding. But that doesn’t prevent them from getting on and pedaling away.
Risk is essential and once you’ve committed yourself to accepting a certain amount of risk as a step toward leadership mastery, there are ways to make it easier in your everyday life. Consider, for example, the mathematical probability of a given risk coming true, versus the fear you attach to it. Are you worried about having confrontations with your supervisor at work?
Begin keeping a written record of the number of times that anxiety actually enters your consciousness over the course of a day. This doesn’t have to be anything elaborate. Just carry a piece of paper and make a check mark every time you worry about fighting with your boss. On the other side of the paper, note the number of times this confrontation has actually materialized. When you divide the number of arguments by the number of thoughts, you’ll have the real probability of facing the situation. Even if you don’t go through the whole mathematical process, just keeping a count of your negative thoughts can bring their number down dramatically.
Once this happens you’ll see that risk itself is not usually the problem. It’s the fear of risk that intrudes on our daily lives. Sometimes, of course, challenges really will materialize. Leaders accept this; they know it won’t put them out of the game forever and in fact it will ultimately make them stronger. But it can be painful. It can sting, but once it’s happened, you need to live with it and move on. If you accept the level of risk that every leader must learn to take on, a certain number of unpleasant realities will come into your life. Murphy’s Law may not be completely accurate. After all, buttered bread doesn’t always fall facedown, but Murphy was definitely onto something.
There are real problems in the real world. Most of them have remedies, but there will always be issues beyond your reach. Learn to accept them and go forward. As the old proverb says, “The dogs bark but the caravan moves on.” In any case, it’s not circumstances themselves that make us happy or unhappy. It’s our responses to them. It’s how we react to them. Since we have no choice about accepting the inevitable, struggling against it just leads to disappointment and bitterness.
As the philosopher William James wrote, acceptance of what has happened is the first step to overcoming the consequences of any misfortune. Perhaps Mother Goose put it even more eloquently when she stated, “For every ailment under the sun there is a remedy or there is none. If there be one, try to find it. If there be none, never mind it.”
As a leader it’s vital that you take these principles to heart and communicate them to others. This is really a three-part process. First, make it very clear that failure avoidance is not a sought-after goal. Failure is certainly not desired, but risk of failure is perfectly acceptable as long as there is a greater probability of success.
Second, if and when something does go wrong, examine what happened in a proactive framework with a focus on the future. Third, encourage team members to take risks again if the odds seem favorable.
Within those general guidelines some interesting questions can arise. A young woman named Andrea owned a small graphic design business. Recently she’d had an opportunity for a big order from a major firm. It was a much larger job than anything she had previously undertaken, and it would require the purchase of some expensive new equipment.
This would mean taking on some large, short-term debt, since she would have to pay for the equipment now. Her fee from the new client, however, would not arrive for at least thirty days after the job was completed. Andrea spoke to her father about the situation. After a long career in business, he was now retired and acted as something of a leadership master for his daughter. Although he understood that it could be scary for Andrea to sign checks for machines she couldn’t really afford at present, the real risk in the situation was more in her mind than in the material world.
True, things could go wrong. The big client could drop her in the middle of the job, her office could burn down, or she could get a severe electric shock from one of the new computers and wind up in the hospital. On the whole, though, this struck Andrea’s father as a very acceptable business proposition, and one in which the risks were well worth taking. So Andrea’s hand trembled as she signed the checks, but she went ahead and signed them.
This was a situation in which the leader’s role was to act as a reality principle in the risk acceptance process. Andrea’s father pointed out the difference between what might happen in her worst nightmare, and what was actually likely to happen. By not taking the risk, Andrea would certainly avoid all risk of failure, but she’d also back away from the reasonable risks that are a fundamental part of success.
Something like the reverse of this story involved a Los Angeles wholesale jewelry company. Steve, the owner of the company, had traveled to Italy to meet with manufacturers of gold chains and bracelets. One of the manufacturers offered Steve an incredibly good price on a large shipment of gold jewelry, provided Steve paid cash up front. Steve knew that he could make an enormous profit on the shipment, because it was so large and the price was so good.
On the other hand, the upfront payment was more than his entire bank account. He would have to take a second mortgage on his house to raise the money, but he was prepared to do that because the upside potential was so great. First, however, Steve spoke with a colleague who had an office in the same building. It’s a good thing he did, because the colleague pointed out some unacceptable risks involved in the deal.
First, Steve had never done business with this supplier before. If something went wrong, it would be difficult to find any recourse. So once the money went to Italy there would be a period of time when the other party had the cash, and Steve had nothing but an assurance that the shipment would be forthcoming. Furthermore, Steve’s company was already doing well. Was it wise to risk everything to get a new Mercedes? He was already driving a new Lexus. This talk with his colleague brought Steve to his senses. He backed out of the deal. Later he heard that another jeweler had gone for it, and had received a totally different shipment of goods from what he’d been led to expect. He risked good money up front and had gotten next to nothing in return.
By staying out of the gold jewelry purchase, Steve was not being too defensive. He was not engaging in failure avoidance for its own sake. Instead he was distancing himself from a situation that was tempting but had many unacceptable risks, risks to which he was temporarily blind because of his dreams of a big payoff. Steve’s friend had performed an important leadership role by pointing out the enormous risks.
If and when a risk does go bad, a leader should help clarify what happened in a way that avoids punitive judgments (unless someone really acted irresponsibly). There’s nothing to be gained by finger pointing, especially since leadership masters themselves always accept overall responsibility for everything that happens on their watch. In discussions like this, it’s important to identify the things that went wrong as accurately as possible. It’s rarely real negligence that allows risks to go bad.
Often there were good intentions that were simply impossible to fulfill. Andy, for example, graduated from an Ivy League law school and joined an elite Wall Street firm. Having paid for his entire education with scholarships and student loans, Andy was almost incredulous at the amount of money he was suddenly being paid. He was also eager to pay off his debts as quickly as possible. Moreover, he was determined to work twice as hard as any of the associate lawyers. So Andy took on too much too soon, both financially and in his workload. When he started making mistakes in some of his assignments, a conference with one of the firm’s partners helped put the problem in focus.
The risk for Andy was not based on anything he was doing wrong. The risk came from trying to do too many things right. A good leader will see that this is a matter of quantity over quality. It’s a time for redirection and reorientation, not for recrimination. If a leader has performed these functions effectively everyone should feel renewed enthusiasm. It may sound trite, but the best way to recover after being thrown from a horse is to get back on one. This is something leadership masters never fail to communicate to their organizations, not only in words but also in their actions.
Right now how do you deal with risks and occasional failure on your part, by people you work with, or even by members of your family? What do you think? What do you say? Most important, what do you do toward becoming a model of risk acceptance, real-world performance, and resilience when things go wrong?
As previously mentioned, the Dancoff error principle states: “Evolution is optimized by a maximum number of mistakes consistent with survival.” Many years ago the German philosopher Friedrich Nietzsche, expressed a similar idea in rather less technical language. Nietzsche wrote, “Whatever doesn’t kill me makes me stronger.” But it may have been Helen Keller who best expressed the leadership master’s approach to risk and indeed to life itself. “Security is mostly a superstition,” Helen Keller wrote. “It does not exist in nature… Life is either a daring adventure or nothing.”
1. Worrying can cause emotional, physical, and mental stress in your life. How much do you worry when you have a major decision to make? Rate yourself on this scale from one to ten (one, you worry very little, and ten, you worry a great deal).
| 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Worry very little | Worry a great deal | ||||||||
2. Worrying extensively can really paralyze you and keep you from making choices that could benefit your life. Write about something currently worrying you. Make a list of the worst possible outcomes and then reflect on that list. Could you handle the worst-case scenario? Most often we find that when we imagine the worst, the worry becomes less intense. Be sure to practice this exercise to move beyond worry and into action.
3. It is important to get good advice from a wise friend or mentor when you take a large risk. Make a list of at least three such mentors or friends you could contact should you need advice on major “risky” decisions.