Risky Business – Making Phenomenal Decisions (While Not Forgetting the Risk)

Risky-Business-Leadership-Kai-RoerAs a leader, I am expected to make decisions all day – every day. Some decisions are huge, possibly critical to my business or people, while others are minor. Making sure that these decisions are as good as they can be at the time of decision is vital.

There is risk in every decision. Risk of failure, and risk of success. I try to reduce the risk of failure, and increase the risk of success in all the decisions I make. How do I do that, you may ask, allow me share my secret…

The Risk Process

Managing risk is not exactly a new science. Humans have managed risk since the dawn of time, trying to survive in a harsh environment. There should be no surprise then that risk management process’ exist. Depending on your sector, terminology may differ, but the steps of the risk process remain the same.

Good news:  you don’t need to be an expert in risk to successfully manage risk.

The risk process can be summarized in these steps:

1. Risk Assessment

  • You identify the risks involved.

2. Risk Evaluation

  • Evaluate each risk and it’s severity,
  • Classify them by severity and likelihood,
  • Analyze the possible outcome(s) of the risk.

3. Risk Management

  • Decide how to handle each risk. There are two main things you can do:
    • Accept the risk: You accept that this risk may happen, and choose not to do anything about it
    • Mitigate the risk: You decide that the risk is not acceptable, and choose to change its impact.

4. Evaluate and Review

You monitor your process, and make changes as you progress. You may receive new information later that changes the way you perceive some risks. The more you know, the more accurate your map.

There is risk in every decision. Risk of failure, and risk of success.” ~Kai Roer Tweet this!

How Much Risk Analysis Do I need To Do? 

The answer is entirely up to you, your organization and the situation. Sometimes your decision require a rigid process where you must document and analyze many different aspects. Other decisions can be made without writing anything. The secret lies in a list of questions.

The questions follow the process outlined above, and are designed to help you make better decisions.

Questions 

  1. Identifying risk:
    What can go wrong?
    What is the desired outcome?
  2. Evaluating risk:
    What can happen if things go wrong?
    What happens if we do not get the desired outcome?
  3. Mitigating risk:
    What can I do to change the outcome?
    Do I want to change it?
  4. Evaluation:
    What did I just learn?
    How can I reapply that in this decision?
  5. Do I make this decision, yes or no.

The last question is critical. The whole reason behind using a risk process is to help you make better decisions so you can run your company better.

Choosing Right

As you have observed by now, each of these questions can be expanded as needed. This means that if there is an easy decision to be made, you can just run through the questions in your head. If there is a tough decision to be made you can use the exact same process and questions to document the risks involved.

One last note – there are always risks involved which we are not able to identify. I call these Blind Spots. Watch for them!

How do you manage risk in your decision making? Are you concerned with the unwanted outcomes your decisions may create?

Effective Leadership & Personal Success Through Scripting

Effective LeadershipAs leaders and managers we are often thrown into situations that require us to think on our feet and make quick off-the-cuff decision. Often times these moments require a decision that can be driven from a negative emotion. Decisions that are emotionally based, rather than logically based, often end in poorer results, and ineffective leadership (I know, not always). I thought of this idea of scripting, when I was thinking about my Personal Success Plan for 2012.  I was originally thinking of a health goal related to food intake, since I travel a lot. It is not always easy to make the best decisions when eating out. I thought about printing a small card and keeping it in my wallet with answers to food related decisions. Had I done it it would have looked something like this:

  • Corn Tortillas, Not Flour Tortillas
  • Grilled Chicken, Not Fried Chicken
  • Water, Not Soda
  • Brown Rice, Not White Rice
  • Wheat, Not White
  • Granola Bar, Not a Candy Bar
  • Dessert, NO!

The idea with this was that by reading this often, I would make a decision in my head logically, before I needed to make it emotionally. Later, when required to make the emotional decision; such when I was tired, stressed, and hungry, the decision would be made for me because I had already decided what I truly wanted and needed to eat.

Effective Leadership Through Scripting

With any type of training, you practice, practice, and practice, until the desired action and decisions are second nature. This technique is also common in conditioning a sales person to be able to counter resistance. So with that logic, I wondered how I could apply this concept to create effective leadership. Several days later, after a “situation”… I found myself sitting down and thinking, “What just happened?” Well, I had made an emotional decision, contrary to what I knew I should have done.

Since it was emotional, I knew I could have scripted the decision beforehand, then when I found myself in the heat of the moment, I would already know what to say. Here are some thoughts of scripting in leadership and management situations.

  • “I would like to think this over for a little bit,” instead of, “We need to have a meeting right now to discuss this.”
  • “I have some time at _____,” instead of, letting someone interrupt a project or task you are working on.
  • “Our low cash-flow and company policy do not permit us to give employee loans at this time, but if you like I can give you the contact information to a financial advisor,” instead of, “Well, I guess this time we could make an exception and loan you $500 for ________.”
  • “Our company policy does not allow me to give you a raise, but our performance based compensation plans will allow you to earn more money by ________________, let’s talk about how you can do that,” instead of, “No.”

Getting Started With Scripting Your Way To Effective Leadership

Schedule an hour now to think about the poor or emotional decisions that have compromised your effective leadership or management decisions. Write down what you should say and what you should not say for various scenarios that you find yourself in. Refer to that document occasionally, and add to it as needed. Later, subtract the decisions that become second nature, or in other words, that you master.

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So, now that you’ve read this article, how are you going to use this information to bring effective leadership to your life or your organization? What scripting ideas do you have to create effective leadership?

Please take a moment and share your ideas in the comments section below, share this with your social media friends, and subscribe to receive A Slice of Leadership notices, as well as occasional leadership advice, articles, tips and freebies.
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