Risk Intelligence Archives

A lot of the time (but not always!), skepticism is construed as managing risk.

Personally, I believe that skepticism has become a mindset that has gained major footing in American culture. It’s like a screen that colors our daily sentiment. We are weighed down by it, and a lot of the time will approach a new situation with a level of negative skepticism as a defence mechanism so to avoid meaningful change.

But I think what’s key to note here is that it’s fine to be skeptical on a topic. Friedrich Nietzsche once said, “Great intellects are skeptical,”. However, it can be detrimental to be a skeptical person. This mindset will only hold someone back from their potential, their ability to grow, and their ability to be their best self.

Whilst middle managers may lean ever so slightly towards the skepticism end of the risk management scale while they develop broader situational development, executives should be in risk management mode to best lead the organization and their teams.

This is about incorporating a healthy dose of risk management when making decisions and strategizing to push the company to a new level. It’s about understanding how to navigate compliance and regulatory, protecting company assets, understanding economic outcomes, and communicating plausible scenarios. It’s not about apprehension to change, distrust in the new perspectives, reluctance to evaluate new opportunities, and being suspicious of the unknown. Managing risk versus skepticism is often the difference in making inclusive decisions and creating a culture for broad, needed change.

If we were to apply this to a chief financial officer’s (CFO) role, being seen as skeptical will mean that the most creative and innovative ideas will go around them. It is likely that they won’t be brought into the decision-making process if their lens is always a skeptical and pessimistic one; they will be pushed away from the decision table. To be a good partner to these potential innovations, they have to have a healthy sense of risk management. This means covering potential blind spots without stunting innovative growth opportunities.

However, just like being too far on the skeptical side of this scale can hold you back, being too far on the optimistic side can also have drawbacks – most notably, making decisions without considering the risks at all.

Finding a balance between these two will make for an executive who is managing risk while also taking risks, as without any risk there is no reward.

If you would like to discuss how we can help coach an effective risk management strategy to your executive team, please get in touch with me at ken.merritt@orgshakers.com

Last week, I wrote about a personal milestone, the 40^th anniversary of my first solo flight in an aircraft aged just 16, and what I have learned about business leadership from my flying experiences.

This first article was focussed on self-awareness, risk mitigation and shared responsibilities.

There are three additional areas that really stand out for me.

The first of these is about effective communication. Pilots are taught to communicate effectively, for example with Air Traffic Control. In order to do this, they have to learn to listen carefully, to allow the speaker to finish what they are saying and to seek clarification of any detail of which they are unsure, no matter how minor.

Effective business leadership and outstanding communication are inextricably intertwined. The strongest leaders spend much of their time listening for understanding, they actively want people to speak up without fear of a negative consequence and they respect differences of opinion and champion the best ideas, regardless of who has voiced them. They also quickly adapt their communication style as circumstances develop.

The next area is about creating the right culture – a culture that facilitates careful consideration and calculated risk-taking on one hand and that also deals constructively with the aftermath when mistakes happen. It recognizes when something has gone wrong, it brings it to the table and focusses on what can be learned, rather than attributing blame.

Most pilots learn significantly from what’s gone wrong for others and consequently have the humility to openly admit to their own mistakes and share what they have learned as a result. In my experience, the best business leaders are comfortable doing the same.

Finally, and most importantly, flying for most pilots is fundamentally about continuous learning and self-improvement. Every experience is an opportunity to learn and become more skilled and more effective than the day before. This goes way beyond any regulatory requirements and can include both formal and informal training, listening to others and active self-reflection. In my own case, it extends to a personal journal that I complete after every flight.

Similarly, business leaders who stop learning stop leading. Business leaders who create most impact tend to look on every business challenge as an opportunity to learn something new for themselves, and then share their learnings so that individuals, teams and organisations can adopt a similar mindset and achieve sustainable growth. They are able to step up from the hurly-burly of the everyday and take responsibility for their own learning and for the learning of those around them. In this way, they also create the strongest legacies.

In business, the overall approach to continuous learning differs by sector, organization and individual. Whatever the approach, mentoring and executive coaching can play a vital role. They help leaders and aspiring leaders develop self-awareness, thinking and understanding, good judgement and communication skills in a safe, thought-provoking and creative way that is personalized to the needs and circumstances of the individual.

They foster a mindset around continuous learning and self-improvement in order to maximise personal and professional potential and, for many people, they ultimately help them become more fulfilled in their careers. For me personally, this is what I most enjoy as a mentor and executive coach.

That day 40 years ago remains vivid in my memory, particularly my instructor stepping out of the aircraft, smiling and signing me off for solo flight. After I had landed, a little stunned at what I just done, his congratulations and just a few words that made a big impact on me, “A textbook first solo, I’m sure it’s the first of many.”

He was correct. I just hadn’t anticipated that I would find parallel learnings in flying and in business.

If you’re interested in learning more about mentoring and executive coaching, or if you have anything to add to this article, please contact me. I’d love to hear from you.