This guest post is by Alan and Harriet Lewis, owners of Grand Circle Corp.,which offers travel services to people over 50. Their new book, “Driving With No Brakes,” recounts the leadership lessons they have learned over 25 years and seven continents.
Risk-taking has fallen out of favor in the last two years, the victim of the economic downturn and global unrest. Indeed, the current business mood has become cautious to a fault. Sit tight. … Keep your head down. … Above all, minimize risk. This is what passes for sage advice in today’s business press.
We disagree. In our 25 years as owners of Grand Circle Corp., we have found that risk-taking always advances our business — in every market and in every season. Risk-taking catches opportunity and keeps you nimble. It builds personal courage and corporate resilience. It allows a company to adapt to changing circumstances and grow to its full potential, even in the face of difficulty.
In fact, we have taken some of our biggest risks in times of crisis and change. When 9/11 brought travel to a standstill in Europe and the Middle East, we bought up all the inventory we could find and emerged as the leader in those markets. Similarly, during the recent economic crisis we aggressively cut our prices, cultivated our best customers — and celebrated our third-best year ever.
We believe in “risky business,” and here are four lessons we’ve learned that can be applied to any business.
- Risk-taking is not just for leaders. All employees must be willing to take risks to advance the company. Not just the executive team — everyone. Our business requires it. We have more than 30 offices around the world, and each is fully responsible for the development and delivery of trips in its region. Everyone must be ready to lead at a moment’s notice, from anywhere in the world, and that’s only possible if everyone has daily practice taking risks. Risk-taking builds character and employee confidence – a win-win for any company.
- Risk-taking requires support. Risk-taking doesn’t come naturally to everyone, and it can be hard for employees to embrace it. Managers can help by specifying what risk-taking looks like in their workplace. Employees should be expected to speak up, ask tough questions of leadership, move forward with decisions without always knowing the outcome, and accept new assignments gladly. At the same time, managers must identify and reward such behaviors. They must teach them. For us, this happens in the office, on team off-sites, and at our annual companywide training, which incorporates risk-taking exercises from Outward Bound and other experiential learning programs. In other companies, risk-taking might look different. For example, employees might be expected to speak in public, lead a cross-departmental team, or go after three new accounts a week. The behaviors may be different, but the support is the same: identify, teach, and reward.
- Risk-taking must be embedded in a larger corporate culture. Of course, employees can’t just go off half-cocked, doing any risky thing they please. Risk-taking must be guided by the company’s vision and mission, and bounded by the company’s values. A company’s mission, vision, and values are its greatest assets, but they are worthless if you don’t cultivate them. Leadership must refer to them constantly, and employees must be held accountable to them in performance reviews. When the corporate culture is completely clear, risk-taking will always support the goals of the company.
- Risk-taking means you will make mistakes. Every risk-taking organization will make mistakes once in a while. We’ve made lots of them. In the 1990s, we invested $11 million in a computer system that didn’t work for us. Around the same time, we divested financial operations on our overseas offices and got robbed – several times. Mistakes and losses are part of the risk landscape. To succeed as a risk-taking business, you must do two things at a minimum: You must create a safe environment for employees to make mistakes, and, when a risky decision is on the table, you must always be ready with a fast exit plan.
Risk-taking is one of our six core values and has helped build our business in good times and bad. What risk will you take today?
Image credit, almagami, via iStockPhoto.com