Leadership can be challenging in the best of times. When unexpected circumstances dominate your business agenda, being a leader can become significantly more challenging.
Let’s start by exploring what is being asked of the leader when unexpected events dominate. First, you find yourself and your team focused on today and a neverending stream of urgent problems to solve. It’s overwhelming. Second, it’s unclear what you need to do to make the situation better. Third, it feels like someone or something outside of your business is in control.
Risk management aims to prevent unexpected circumstances from dominating your business agenda. Risk management also helps you lead when unexpected circumstances take control. We call this “Risk Enabled Leadership”.
When we speak of “Risks” in business, we are speaking about uncertainty in the future. Risk management refers to the steps you take to manage that uncertainty and create new opportunities for you and your business. In recent years, we have seen significant growth in the knowledge of how to manage risks in business. This knowledge is reflected in the development of several global frameworks, programs in risk management at universities, and new roles being created such as Chief Risk Officers. We can use this knowledge to give us the skills to lead our businesses when unexpected circumstances dominate. To be successful, a Risk Enabled Leader develops strength in these three areas.
To begin, uncertainty triggers our self-protection mechanisms. Leading in uncertain times asks us to understand how uncertainty makes us and our team members feel. Simply, uncertainty leads to anxiety and fear. This is very normal. We all respond this way. Specifically, how each of us reacts to this anxiety and fear depends on our past experiences and in this, we are all unique. The challenge for leaders is that when dealing with emotional responses, logic is not helpful. A Risk Enabled Leader accepts that uncertainty leads to emotional responses and develops skills to respond effectively.
Next, we only know what we know. We created biases to help manage uncertainty. Uncertainty inherently means that when you are facing issues and decisions, you may not have the knowledge or experience you need. When it’s obvious that you do not know something, you know to ask. The challenge is that our brains like to fill in the gaps and we may not always be aware that we don’t know. Our biases take over. This is one of the ways our brains reduce discomfort with uncertainty. A Risk Enabled Leader is aware of their and their team’s biases and actively seeks alternative answers. They recognize when they are being dismissive of a novel idea.
Lastly, trust is key. Trust is a complex idea and distrust can show up in different ways. One of the most important tasks for a leader in uncertain times ensures that their entire team understands and is focused on the overall goal. This often means that the leader needs to step away from the immediate crises and trust their team to solve these. This is to allow the leader, you, to work out the overall long-term goal and how to reach it. Fear and biases subconsciously undermine our trust. Risk Enabled Leaders to understand their role in the company to create the unifying goal and motivate their team to achieve it. In doing so, they boldly trust their team to know theirs. In a crisis, the team’s job is to address today’s challenges. The leader’s job is to focus on tomorrow and reducing the pressure the team feels moving forward.
Leadership is the art of influencing the teamwork together and accomplish a shared goal. Leadership is not about authority, science, skills, or knowledge. Leadership is all about how humans interact at an emotional level. A Risk Enabled Leader embraces being human and uses this to help inspire the team.