Is Your Risk-to-Reward Ratio Out of Whack? June 10 2011

Ringoffire Yesterday, I was in Pittsburgh talking with a group of executives from different companies headquartered there about what they had taken away from my book, “The Next Level.”  It was a really interesting conversation as everyone shared their lessons learned and ongoing challenges with taking on bigger leadership roles.

One of the things we talked about was “they,”  as in “They will never go for this, approve this, let us do this, etc.”  A pretty senior executive in the room started us on that line of discussion by saying that one of the things he’s been working on is questioning his assumptions about who “they” even are. He’s concluding that a lot of things that should be done don’t get done because leaders stop before they get started.  Since these leaders assume that “they” won’t go for it, they don’t go any further with their good ideas.

Everyone in the room agreed that they had seen this play out in their own real life experience. I shared that I certainly have in mine both as an executive years ago and as an executive coach for the last 10 years.  My observation, which resonated with the folks in Pittsburgh, is that a lot of rising leaders overestimate the risk of stepping forth with a good idea or a big idea and underestimate the rewards of that idea being implemented.

Most everyone agreed that as long as the risks are grounded and calculated, it makes sense to take the risk of going to “them” with the good ideas. It’s probably not as big a risk as you think it is, and it might just yield rewards that everyone associated with your organization can benefit from.

What do you think about adjusting your risk-to-reward ratio?

3 Responses to “Is Your Risk-to-Reward Ratio Out of Whack?”

  1. Gayle Ely says:

    For me grounding and calculating the risk begins with the question "What is the worst that can happen if I approach "them" with an idea?" In addition, the risks can be mitigated if I prepare well for and make sure the timing of the conversation is good. (Hint: Not the day before the boss is going on vacation).
    Also, since I am probably one the staff might consider "them", I'd say come to me with an idea for which you can articulate the benefits and have thought about an implementation strategy. If you don't, the idea becomes just one more thing on my plate and even if it is a good idea is likely to get crowded out by other things.

  2. Leon Noone says:

    G'Day Scott,
    I'm not sure if you're old enough to remember the "good old days" of TA:Transactional Analysis, in the !970s/80s.

    It was all the rage in"experiential management."

    One of the things I remember about risk/reward was this. Ask yourself two questions: what's the worst thing that can happen if I go ahead? What's the best thing that can happen if I go ahead?

    It might sound a bit "folksie" in Century 21. But it's a useful tool.

    When working with groups, I also found that modified Delphi technique was useful, especially with the use of weightings.

    It all seems so long ago…..

    Interestingly enough, I notice that the readers of "Advertising Age" recently voted the Al Ries and Jack trout book "Positioning" as 'Best Marketing Book Ever.' It was first published in 1981.

    There ya go.



  3. Scott Eblin says:

    Hi Leon and Gayle –

    Loving the fact that you both came back with very articulate versions of the same advice – What's the worst that can happen? I use that one myself!

    Cheers –


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