Risk-Taking Among Managers
25 May 2011
Read by 1943 persons
Some managers believe they can better understand risks by centralizing the decision-making process as much as possible. In a context of uncertainty, low visibility, and accelerated change, deciding alone considerably increases the risk of failure. The notion of risk traditionally refers to two dimensions: occurrence and impact.
Risk is present everywhere in our lives, private or professional, whether we face it or not. To manage a company or one's career, every individual must make decisions to create opportunities because inaction leads to stagnation, a factor of failure. Consultant at LMS & ORH, Omar Benaini, explains the behavior of the Moroccan manager in the face of this reality and emphasizes that to confront it, "we must consider multiple perspectives and deal with often contradictory assessments."
Is risk-taking common among our managers?
In reality, risk-taking is inherent in any decision-making process. Not taking risks means accepting stagnation and inertia. The decision-maker must learn to decide on uncertain future options and make trade-offs with incomplete information. They must get used to the idea that they cannot control anything with certainty and that success is also a matter of opportunity, chance, luck, and compromise.
In a world without absolute certainty, rather than trying to tame the uncertain, the decision-maker would benefit from refining probabilities through more listening, knowledge, and understanding.
This state of mind is one of the most difficult things for a manager to acquire.
Does risk-taking pose a problem for managers? If so, what is the context?
Indeed, we have observed that some managers believe they can better understand risks by centralizing and personalizing the decision-making process as much as possible.
The manager considers themselves as "the one who knows" rather than the one who adapts to an environment. Arrogant, centralizing, opaque, isolated in their ivory tower, they withdraw into themselves and take refuge in self-persuasion to make often high-risk decisions.
In a context of uncertainty, low visibility, and accelerated change, deciding alone considerably increases the risk of failure. Yet many managers remain attached to the stereotype of the leader who decides "freely" and who can do everything: visionary, strategist, expert, technician, recruiter... In doing so, they accumulate the risks of error.
How to assess one or more risks?
The notion of risk traditionally refers to two dimensions: occurrence and impact. A risk that has a high probability of occurring and whose impact on the company could be major must be monitored, contained, and anticipatory solutions must be prepared in advance to reduce its effects.
On the other hand, a risk that can only arise occasionally or whose impact is negligible on the company's activity should not be part of the risk map followed by the manager.
A poor understanding of risk-taking can have consequences on the company's internal environment. Can we know what they are?
In the current context, the decision-maker faces a major dilemma: taking risks for greater efficiency, proactivity, and performance, but at the risk of sacrificing certain rules and procedures. You can't make an omelet without breaking eggs!!! Or strictly respecting the rules and standards, at the risk of missing opportunities and falling into inefficiency and underperformance.
This balancing act between prudence and action, between conformity and efficiency, between the fear of making mistakes and the fear of missing opportunities, fairly summarizes the paradox of risk-taking in organizations, whether public or private. The leader must tame and manage this dialectic.
How far can a manager take risks in terms of management?
The role of the decision-maker is particularly exposed both internally and externally. Even more so since the current context has brought the notions of governance, ethics, transparency, integrity, respect for values, accountability, social responsibility, etc., to the heart of company life.
Leaders are more than ever challenged by "stakeholders" on their decisions, their risk-taking, the conformity of their actions with standards and procedures, etc.
One of the challenges for managers is to become aware of the impact of their decisions or lack of decisions on their company. Because let's not forget that inertia is also a decision and a choice, and one must assume the consequences.
In your opinion, should individual or collective action be favored in the face of risk?
To decide, the leader must take into account multiple points of view, often contradictory. No manager can foresee everything or find solutions to all problems. By accepting to share the reflection, information, and energy of all the company's stakeholders, we contribute to reducing risk and we can better calculate and manage it.
The maturity of a manager lies less in their authority than in their ability to bring together a multitude of actors to reach an acceptable decision that is more likely to be implemented with less risk of error.
We must consider multiple perspectives and deal with often contradictory assessments.
A leader must show more exemplary behavior as a leader than as a "boss." They must know how to empower their employees to encourage them to protect themselves, each at their level of risk, and help them anticipate the solutions to be implemented if the risk is confirmed.
Brahim Habriche.
Published May 11, 2011
Posted online May 25, 2011
Lavieeco.com
Risk is present everywhere in our lives, private or professional, whether we face it or not. To manage a company or one's career, every individual must make decisions to create opportunities because inaction leads to stagnation, a factor of failure. Consultant at LMS & ORH, Omar Benaini, explains the behavior of the Moroccan manager in the face of this reality and emphasizes that to confront it, "we must consider multiple perspectives and deal with often contradictory assessments."
Is risk-taking common among our managers?
In reality, risk-taking is inherent in any decision-making process. Not taking risks means accepting stagnation and inertia. The decision-maker must learn to decide on uncertain future options and make trade-offs with incomplete information. They must get used to the idea that they cannot control anything with certainty and that success is also a matter of opportunity, chance, luck, and compromise.
In a world without absolute certainty, rather than trying to tame the uncertain, the decision-maker would benefit from refining probabilities through more listening, knowledge, and understanding.
This state of mind is one of the most difficult things for a manager to acquire.
Does risk-taking pose a problem for managers? If so, what is the context?
Indeed, we have observed that some managers believe they can better understand risks by centralizing and personalizing the decision-making process as much as possible.
The manager considers themselves as "the one who knows" rather than the one who adapts to an environment. Arrogant, centralizing, opaque, isolated in their ivory tower, they withdraw into themselves and take refuge in self-persuasion to make often high-risk decisions.
In a context of uncertainty, low visibility, and accelerated change, deciding alone considerably increases the risk of failure. Yet many managers remain attached to the stereotype of the leader who decides "freely" and who can do everything: visionary, strategist, expert, technician, recruiter... In doing so, they accumulate the risks of error.
How to assess one or more risks?
The notion of risk traditionally refers to two dimensions: occurrence and impact. A risk that has a high probability of occurring and whose impact on the company could be major must be monitored, contained, and anticipatory solutions must be prepared in advance to reduce its effects.
On the other hand, a risk that can only arise occasionally or whose impact is negligible on the company's activity should not be part of the risk map followed by the manager.
A poor understanding of risk-taking can have consequences on the company's internal environment. Can we know what they are?
In the current context, the decision-maker faces a major dilemma: taking risks for greater efficiency, proactivity, and performance, but at the risk of sacrificing certain rules and procedures. You can't make an omelet without breaking eggs!!! Or strictly respecting the rules and standards, at the risk of missing opportunities and falling into inefficiency and underperformance.
This balancing act between prudence and action, between conformity and efficiency, between the fear of making mistakes and the fear of missing opportunities, fairly summarizes the paradox of risk-taking in organizations, whether public or private. The leader must tame and manage this dialectic.
How far can a manager take risks in terms of management?
The role of the decision-maker is particularly exposed both internally and externally. Even more so since the current context has brought the notions of governance, ethics, transparency, integrity, respect for values, accountability, social responsibility, etc., to the heart of company life.
Leaders are more than ever challenged by "stakeholders" on their decisions, their risk-taking, the conformity of their actions with standards and procedures, etc.
One of the challenges for managers is to become aware of the impact of their decisions or lack of decisions on their company. Because let's not forget that inertia is also a decision and a choice, and one must assume the consequences.
In your opinion, should individual or collective action be favored in the face of risk?
To decide, the leader must take into account multiple points of view, often contradictory. No manager can foresee everything or find solutions to all problems. By accepting to share the reflection, information, and energy of all the company's stakeholders, we contribute to reducing risk and we can better calculate and manage it.
The maturity of a manager lies less in their authority than in their ability to bring together a multitude of actors to reach an acceptable decision that is more likely to be implemented with less risk of error.
We must consider multiple perspectives and deal with often contradictory assessments.
A leader must show more exemplary behavior as a leader than as a "boss." They must know how to empower their employees to encourage them to protect themselves, each at their level of risk, and help them anticipate the solutions to be implemented if the risk is confirmed.
Brahim Habriche.
Published May 11, 2011
Posted online May 25, 2011
Lavieeco.com
