Leadership ➝ Part 2

In Leadership Part 1, I offered my thoughts on successful leadership noting the goal of leadership is achievement, which is the only measure of performance of leadership. In this article, I observe that the fuel for achievement is risk.

Too many believe the best path in any endeavor is to eliminate or avoid risk. Zero risk, it is argued, is the best way to protect against loss. True enough but it is just not realistic. As Barry Farber, American conservative radio talk show host, author and language-learning enthusiast noted, “there is no reward in life without risk.” In my experience, I have seen this to be true.

More than that, my life has taught me that the greater the risk, usually the greater the reward. However, in this regard one has to have little fear of failure. So there must be a good working compromise between some and too much that works in business. There is. And it’s one that is elemental to good leadership.

World War II general and 34th US president Dwight Eisenhower — a great American leader — was fond of saying “the ideal leader is one who invariably acts kindly and with consideration and is still decisive and instinctively bold.” He knew that risk is the fuel of achievement.

One of the realities of being in any position of leadership is that you have to deal with risk—you cannot avoid it. Most of the time people try to avoid risk due to fear. Fear is usually manifested in our psyche as fight or flight reactions for self-protection which is totally natural. In business, it is usually the fear of failure or loss where the margins are tight and the differences between achievement and failure can be very close calls but the option to fight or flee is not available. So doing what is not natural is difficult but necessary and the best way I have found to deal with these fears is to face them and learn how to overcome them to be successful over the long haul. This gives weight to the notion one must have a way, a process, to deal with risk and use it to gain advantage.

One way I learned to manage risk successfully in the military that I find still works today is through a process known as Operational Risk Management, or ORM. We first used it to reduce our aircraft mishaps which were more prevalent than combat losses and extraordinarily expensive. We found it also worked in every other facet of military life including our off-duty hours such as recreation and even everyday driving.

There is a lot of information about ORM. Organizations have been using it for years and adapted four, five and even six-steps to process risk management. The one I found effective through my crisis management experiences is a four-step process with an ABCD mnemonic for easy use in a deliberate (preventive) or time-critical (crisis) way.

It is a cyclical procedure that begins with identifying hazards, then assessing them for risk to you or your project, developing controls and making decisions about how to deal with these risk hazards, implementing the controls to minimize the potential damage from risk, then evaluating the controls and watching for changes, e.g. supervising. The process then repeats for as long as the risks are present or you are in the endeavor. It goes like this:

A – ASSESS the situation — your potential for error could cause loss or failure — by identifying hazards and assessing their impact, you instinctively think how to mitigate them using your good judgment and experience;

B – BALANCE your resources — to prevent and trap errors — by assessing the hazards and making risk decisions to preserve what you can and cannot lose and bring assets to bear to limit their negative and/or maximize their positive impacts on you;

C – COMMUNICATE (risks and intentions) by making risk decisions and implementing controls to mitigate the hazards to you including ensuring that others know what they are;

D – DO AND DEBRIEF (take action and monitor for changes) by implementing controls and supervising, e.g. watching for changes, reinforcing what works and what does not then repeating the process to modify what does not.

Arguably the two hardest truths about being a leader are persuading those above you to let you do your job and allowing those below you do theirs. Sometimes these become showstoppers by themselves much less when added to the unanticipated events that come to you as a manager. It is really a matter of trust and it becomes one of the most common risks in business. For the manager, it is like walking a tightrope. Using ORM, let’s review a practical, simple scenario of a subordinate working on a critical project.

A – ASSESS. Your subordinate is not known to have experience in a particular project that is time sensitive. You know what to do, you have done it before. Identify the hazards:

1 – The project could fail or not be ready on time
2 – Your subordinate appears not to be equipped to do the project
3 – Inordinate amount of resources could be expended on this project
4 – You have to do it yourself which will distract you from other important work you are responsible for which ultimately also undermines your subordinate, de-motivates him or her, and fails to prepare that subordinate for more to follow

B – BALANCE. Ensure that your subordinate has the right resources to see to it that the project stays on track:

1 – Mentor your subordinate through the project until he or she shows the competence to complete it unaided—make sure there is enough guidance, unfettered access to you for questions, materials, etc. to complete the project
2 – The key to your leadership is persuasion—asking the right questions and offering judicious guidance preserves your valuable time; focus on the ‘what’ and delegate the ‘how’ to complete the project and develop your subordinate
3 – Ensure your subordinate knows what your views are regarding the the critical show-stoppers — the redlines — and to come to you when they pop
4 – Be willing to take responsibility for their actions with the limits you impose on how far they can go without more resources

C – COMMUNICATE. Make the risk decisions and implement controls:

1 – Be clear in your direction; don’t leave things to assumption or chance—tell the subordinate what not is to be assumed or crossed, e.g. when to come back for more guidance
2 – The difference between brilliant management and micro-management is not about the details—it is about the right details you know from your experience
3 – Play the “what if's” for what could go wrong and what you expect to be done about them
4 – Make the tough decisions on risk or take them above your level if they are that significant but don’t leave them for your subordinate

D – DO and DEBRIEF. Put orders in place and review steps with situational or time-driven decision points:

1 – Once you have communicated the controls for implementation, monitor the progress in stages with feedback to see how they are working
2 – Review the hazards to put them into context for their significance as conditions change, thread them together to find trends, use them as teaching points once they are mitigated or worked around
3 – Ensure others see how the hazards were navigated to develop skills, e.g. go back and review what did work and what did not
4 – Go back to assessing because the process follows the changes which can pop unanticipated new hazards or may have only temporarily suppressed them

The greatest benefits in teaming risk management are in achievement and your people. Risk is a part of everyday life. It is fuel for achievement and should be viewed as producing opportunities rather than just challenges, the topic we will address in the next article.

Awareness of risk is often enough to help create success but when more substantial thought must be applied, a process such as ORM can be very helpful in assuring achievement. Building trust in your people to do their jobs builds competency for future projects as well as protecting and preserving your time for your other responsibilities, i.e. balancing resources. As an additional benefit, this develops your subordinates’ trust in you as a manager.

BOTTOM LINE: Get things done and develop your team to be better prepared for dealing with risk.