Startup HR: What is Risk?

by Tricia Hollyer | Startups

I’ve been thinking lately about the notion of risk, of how we know when to take risks, when not to, when a risk is a “good” one. In both our businesses and our lives, what do we use to decide whether a risk is worth taking? And what is the impact when we shy away from risk, or embrace it too quickly?

In our businesses, we take risks all the time. We create a product and hope our customers will buy it. We hire someone we really don’t know and hope they will be a rockstar, or at least not a nightmare. We make many leaps of faith without knowing whether they will work out.

So how do we know when a risk is the right one? What guides our decision-making in terms of acceptable risk?

There are frameworks available to help the framework-inclined decipher the level of risk and the potential impact (like this one in an article by Akira Hirai about what kills startups). This is a useful way to process the decision logically and methodically, but do we really put that much effort into assessing every risk we face? It certainly makes sense for big ones, for strategic planning and new product direction and the ones where you’re betting the farm on the outcome.

SEE ALSO: You Don’t Have to Quit Your Job to Be Happy

But I think a part of understanding risk and its impact in our lives and our businesses is understanding our attitude towards it. Some of us look at a framework like the one above and feel comfort at the thought of carefully analyzing the situation. And some of us look at any kind of framework and run in the other direction. Over-reliance on either side doesn’t work, but understanding where you are on the continuum of adrenaline-junkie to only-acts-when-results-can-be-exactly-quantified is important in knowing how clearly you’ll be able to assess the risks you face.

I tend to take big, huge leaps, like when I quit my six-figure job without a plan in place or any real realization of what I was doing until the words came out of my mouth in a conversation with my boss.  But I also tend to shy away from small risks, like saying what I really think in a conversation or taking a singing class. I understand that about myself, so I work at getting more comfortable with taking small risks by doing them more often. Like saying yes to first dates, or going to events by myself where I don’t know anyone.

Playing with my relationship with risk allows me to build my capacity for uncertainty and ambiguity and to push myself outside of my comfort zone. Doing so in my personal life allows me to show up as a leader in a way that transfers over – I can be more comfortable with challenges and risks at work because I’ve practiced getting more comfortable with them at home.

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What is your relationship to risk? Do you feel more uncomfortable about taking risks in your work or your personal life? How can you bridge the two so you find a balance that pushes your edges as a leader and as a person, while still allowing a level of stability that suits your personality and your professional goals?

Knowing your relationship with risk and consciously developing it in the direction you want to go is a part of building your capacity as a leader. So what scares you right now? What risk can you take that feels uncomfortable but that your heart says might be the right one?

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Tricia Hollyer

Tricia Hollyer

Tricia Hollyer is the owner of Compassionate Leadership, a consulting firm that specializes in providing HR expertise, coaching, and management training to fast-growth companies. Prior to starting her own company, Tricia was an HR executive in the technology industry for 18 years, going from startups to buyouts of multi-national public companies like Peer 1 Hosting. She is an expert in people... more

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