Lesson 12º








Running Risks

The leader is aware that at times he has to run some risks.

There are moments when he will have to make decisions without having all of the information that he would ideally like. It is not absolutely clear what is the right decision, but it is necessary to make one.

In this state of uncertainty, the leader shouldn’t have a mental block but should make the decision which he believes is the right one.

On other occasions, opportunities present themselves. Sometimes they are not totally defined, but if he knows how to take advantage of them they can be very beneficial for the company.

This obliges the leader sometimes to have to “bet”. Although these decisions have been analyzed in great detail, there is always a high risk.

These types of decisions can demand heavy investment. The leader tries to beat the competitors to it; if he gets it right the company can obtain important profits, if he gets it wrong they will have wasted resources.

The leader assumes this risk, knowing that he could win or loose.

What is fundamental in these situations is:

To show the organization that the leader is a courageous person that does not hide in the presence of a risk and that he knowss how to go forward when it is necessary.

When he runs risks they are not decisions made on a whim, they are not based on the feeling that comes from the leader, but they are decisions that have been studied, he will have consulted his team (especially if the risk is high) and he makes the decision because if he doesn’t he will be running a greater risk (missing opportunities, remaining behind the competitors, handing over markets, remaining obsolete, etc).

The risks that the leader takes are not taken on a whim: if it is the wrong decision, the company will get damaged, but the company will overcome it, it will not yield.

However, under no circumstances can the leader make decisions by tossing a coin (except in extreme situations).

In the competitive and changing world that we live in; not accepting risk is considered condemning yourself to failure, as other competitors will run risks.

This is the risk of not taking risks.

The leader shouldn’t fear failure. When he makes decisions they are not always going to be right; when this happens the leader has to learn from his mistakes and try to avoid them in the future.

When an adopted decision is the wrong one, the leader does not sink. He analyses what was wrong and he tries to take measures to avoid these mistakes happening in the future.

The leader always looks forward.

Finally, to point out that the leader will create, within the company, a culture of assuming risks.

If the decision is wrong but was carefully thought about, the employees will understand. They will support him in these difficult moments.

What he can not accept, under any concept, is that a person assumes risks without really thinking about it “without doing their homework”.