A lesson in risk-taking in business

Academy Groups 5 and 32 enjoyed the benefit of a really powerful and surprisingly relevant session with Caspar Berry (pictured) on “Poker as a Metaphor for Risk-Taking in Business” on 23rd April. I say surprisingly because Caspar is an ex-professional Poker player and Media “personality”; so everyone present expected an entertaining and intriguing session – but we got even more than just that: we got real insight into the psychology and traits behind our own (and other’s) behaviours when placed in situations where real choices have to be made – real risks to be taken.

I picked up 4 key points from the session:

1. It is normal to fear short-term failure (ie, if taking a bet at poker or making a decision at work where there is the real possibility of loss – be it money, time “face” or reputation – we all experience some fear/discomfort at the thought of losing that “gamble”.) However, really successful people focus upon Long-Term gain. If we make lots of calculated gambles when the odds are in our favour we will OFTEN lose individual bets: but in the long-term we will make a return. We must face our fears of short-term loss in order to achieve Long-term gain.
2. Accepting that to be true, we can see that losing a calculated risk/gamble is NOT FAILURE – it is an essential step in the path to Long-Term success.
3. Long-Term failure is often the result of not taking enough well thought-through short term risks, or of taking too many badly thought-through short term risks. Both of these traits can and should be managed, and it is essential that business leaders are clear about their strategy and culture in relation to these two possible sources of Long-Term failure.
4. It is LONG-TERM FAILURE that organisations and individuals should most fear: the risk of short-term “failure” on carefully calculated gambles or projects should be embraced. For that to be possible the individuals within an organisation need to really understand the relationship between Short-Term risk-taking and Long-Term Failure, and must really understand their organisation’s rules and objectives in this area. Many organisations claim to “embrace risk” or to not have a “blame culture” – but do key staff really know what that means in the real world: especially in these most risk-averse of times?

Fear of short-term (project-by-project, decision-by decision) failure is normal, but clarity of thought and a culture that is consistent about the need to avoid Long-Term failure can be a big motivator to help us and our organisations overcome short-term risk aversion and resistance to change.

Peter Pritchett,
Chairman, Academy Groups 5 and 32

The Academy for Chief Executives, a leading provider of experiential business learning® facilitates peer groups of CEOs and Managing Directors who meet together every month to network and take full advantage of experiential learning. To hear great speakers like this every month and engage in The Board You Could Never Afford®, or to find a local group near you, visit www.chiefexecutive.com.