Several reports published in 2018 highlighted the direct link between innovation and risk. One such study from management consultancy Oliver Wyman notes that while finance professionals increasingly look to adopt technologies such as AI, blockchain and robotic process automation, few are prepared for the new types of business risks that may stem from these technologies.
It seems that although leaders are enthusiastic to adopt new technologies, their risk management strategies are failing to keep up. The pursuit of innovation, often considered a business imperative, may actually damage organisations, customers and reputations.
So how do you stay ahead of the curve but manage that risk? Check out our four Top Tips.
1. Do your research
Technologies are developing at such a rate that it is increasingly difficult to keep up with their unforeseen outcomes. However, effective risk management is all about imagining scenarios that have not happened before, and that you hope will not happen. To be ahead of the curve, research the potential directions of travel for the technologies that are most relevant to your organisation and sector.
Come along to one of our four conferences in 2019 focusing on ‘Leadership of, and for, the future’. This will give you the chance to deepen your understanding of the disruptive technologies that are fundamentally transforming the way we live, work and connect with each other and how leaders must evolve to thrive in this constantly changing environment. Take the opportunity to explore the risks these technologies present and how to take advantage of their unprecedented potential.
2. Encourage idea generation
Leaders can encourage teams to push the boundaries of what they think they can achieve which, in turn, increases confidence and improves performance. If the benefits of adopting new technologies or practices are widely understood, teams can be motivated to accept the possibility of failure because of the potential for gain.
Join our free webinar on Evaluating Risk (9 January 2019, 12.30pm) to explore how leaders can create a culture that encourages idea generation and embraces risk, yet manages and measures it appropriately. This will help you clarify the five major steps in managing risk: identify, assess, evaluate, mitigate and monitor.
3. Embrace failure
Fear of failure is the greatest inhibitor to risk-taking. This may be a fear of damaged reputation on an organisational level, or negative impact on your own career prospects. However, research by Cannon and Edmondson (2005) ‘Failing to Learn and Learning to Fail (intelligently) Long Range Planning’, found that the best performers have a low fear of failure. Acknowledge that failure is part of your journey to success.
4. Go for the lines
John Grant, author and strategist, puts another perspective on risk and explains why being risk-averse could have more serious consequences for organisations: “The risk is the safest thing – every tennis player’s best serve is a risk – and that’s where, actually, performance is.” To explore and innovate is in the DNA of some leaders, but if you are less adventurous you should be both reassured and motivated by Grant’s advice.
How to evaluate risk in practice
Try out our flagship e-learning tool, MyLeadership, and take our MyLeadership Opportunities assessment to highlight where your experience and potential strengths lie. Receive a free, personalised report including customised suggestions for maximising your leadership development opportunities.