We attended a conference recently and one of the presenters challenged the audience to think about risk taking and decision making. The suggestion was we should all take a little more risk; but should understand there is a line of unacceptability that must not be crossed.

But as a business, how do you know what are acceptable risks and where the line of unacceptability is?  It strikes us that it’s too easy to blame health & safety for not doing things; but in our experience it’s normally used by people that lack the necessary competence to help make the decisions.

The problem here is that we can restrict our business from thinking enough about the future medium and long term goals because of being overly concerned with the risks in front of us today. Perhaps rather than encouraging people to be so risk adverse, we should be helping them to better understand what the risks actually are.  The focus should be on training our employees to make decisions on what risks can be taken and understand when not to cross the line.

Added to this we need management to recognise what is the potential for gain and what is the potential for loss on the risk decisions being made. A key thing for management to always think about is how they can contain the downside.

So a question for you:  is the biggest risk in the long term not taking enough risk today in your business?   Clearly, you need to avoid gambling as this will most likely result in a loss.

Be careful to consider the upside you want to achieve and what are you prepared to invest to have the chance to get what you want.   At the same time you need to think about the downsides and need to take the necessary precautions – some of which may be uncomfortable.

Thinking about the future is crucial – the first step to great decision making is recognising  that you cannot be certain of the outcome – the key is to not fear uncertainty but to embrace it. It’s about making a calculative judgement and this comes only come from the quality of your risk assessments.