Menu MENU

You are here

Bosses, Innovation and Risk Aversion

Innovation is the lifeblood of every business. Yet, one of the most common laments when people try to explain why the company isn’t coming up with any significant innovations is, “We’re just too risk-averse.” To which a common response from leaders is defensiveness. I've even heard CEOs say, “Tell me which big idea I didn’t fund,” as if their people could prove what doesn't exist. And so a vicious cycle begins. Defensiveness, blame, risk-aversion, and back to defensiveness.

But what should a CEO or any other leader really hear when they want innovation and risk-taking but instead they get "safe" and hear “risk averse”? Well, if they avoid the defensive response and really listen, it turns out “risk-aversion” is code for something entirely different... and deeply personal.

One of the first lessons a facilitator learns is how to conduct a brainstorming session. And what’s the cardinal rule of brainstorming? No criticism or judgment of the merits of the ideas being offered. Why? Because it shuts people down. They won’t make themselves vulnerable by offering ideas that may be summarily judged and shot down in front of everybody else. As a result, many ideas might not be shared and the team never has a chance to make a good idea great. Hence, the cardinal rule in brainstorming.

Most people miss the most important principle behind the brainstorming rule: that to get good ideas to surface, people have to feel safe enough, trust others enough, to make themselves vulnerable. Consider this quote from Brené Brown, professor at the University of Houston Graduate College of Social Work, who said, “Vulnerability is the birthplace of innovation, creativity, and change.”

So, when someone says “risk-averse”, what he or she is really saying is “I don’t trust enough to be vulnerable”, the prerequisite for being innovative. Risk-aversion is often code for an untrusting environment or culture that keeps people from being vulnerable enough to be creative and innovative.

If your workplace culture is "risk-averse" when what is really wanted is risk-taking and innovation, then it's likely a strong indicator of low levels of trust. And trust is all about leadership. So as a boss, when you hear “risk-aversion”, don’t get defensive and try to make the organization prove their claim. Take it for what it really is: a sign that you have work to do. Work to rebuild trust with your employees and a culture that allows people to be creative and vulnerable. Only then will people really innovate.

Comment below with your experience and insight into risk-averse cultures and let me know what you think.

© 2015 ThinkWay® Strategies. All Rights Reserved.