Wednesday, February 23, 2011

Want to take RISK?

Risk the name of the game, if you want to get the profits. So as we have learned for years now, the more the risk, the greater the risk premium, the bigger the profit. But HEYY WAIT!!!!! This excessive risk taking has led the downfall of the bank we read in my last post..

Oh yes. One of the masters of the universe LEHMAN BROTHERS. Our freinds at HBR, have a tip on how to make risks, in tough times.

So lets hope we all sail the rough seas easily in desperate times.

Over the past few years, the economy has forced many companies to play it safe and take few, if any, risks. If your company culture has become — or always has been — risk-averse, try doing the following three things to turn it around:
  1. Evaluate risk-taking. Take an honest look at your company or unit and assess whether people avoid risks. Utilize interviews, skip-level meetings, or anonymous surveys to gauge whether people feel anxious or hold back ideas.
  2. Make idea-sharing safe. Create a "safe space" where managers and employees can voice their concerns, feedback, and ideas — without fear of retribution.
  3. Experiment. Ask a team in a part of the company you want to grow to conduct a series of rapid-cycle experiments to test new ways of working. Make it explicit that failure is acceptable as long as learning comes from it.
Today's Management Tip was adapted from "Taking Risks in Tough Times" by Ron Ashkenas.
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