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July - 2008 - issue > Protocol@Work
“Take the risk of creating risk-taking culture”
Sridhar Jayanthi
Wednesday, July 2, 2008
The topic of risk-taking culture has been on top of my mind recently, especially on the best ways to promote it. It is a topic that should be near and dear to technology managers in India. I have attempted here to provide a perspective on risk-taking in corporations.

Any reference to risk-taking in this article will be what I call as ‘calculated’ or ‘disciplined’ risk-taking in a professional setting. This type of risk-taking is the act of following an unexplored path for executing a task with potential for a superior anticipated results and higher possibility of failure than if a conventional path was pursued. By nature, this risk-taking puts people outside their comfort-zone. ‘Non-calculated’ risk-taking is the approach that is not studied, but applied based on emotion or haste, which should really be considered ‘negligence’.

The technology industry is full of examples of people who were risk-takers resulting in spectacular successes – Bill Gates who decided to sell software in a hardware-driven world, Lou Gerstner who bet on services and changed the direction of IBM, the founding-team deciding to stay at Infosys during its worst period despite poor odds. On a smaller scale, if we look within our teams we are likely to find those risk-takers who decided to try out a new algorithm, or design or process to achieve an extraordinary goal. There are always abundant examples of managers and teams committing themselves to meet unreasonable deadlines to help in a business situation, with a known risk of failure. More often than not, these are heroes of any organization, since they are putting their ‘neck on the line’ to achieve new heights.

Risk-taking can be applicable to every single individual in an organization regardless of role or function. Why is risk-taking culture good for a corporation? In the technology industry, with a vast landscape of unexplored possibilities still open, the fastest path to success requires risk-taking and failing-often. The lessons learned from this approach are extremely valuable in making good future business or technical decisions, if lessons are extracted and memorized. It is unrealistic to expect innovation if risk-taking is suppressed in corporate culture.

Risk-taking culture needs to come from the top and adopted at all levels. The best way to promote risk-taking culture is to clearly and visibly recognize risk-taking behavior and innovation. It is equally important to ensure there is no culture of fear or blame. Fear of failure or ‘skape-goating’ can kill innovation in any company big or small. If anything, publicly recognizing failed attempts at risk-taking and the lessons learned will reinforce this desired behavior. Take an honest look at how you deal with failures. It will provide insight into what type of risk-taking culture might be prevalent in your team. It will help if the management in the organization themselves exhibit risk-taking behavior and demonstration of failures and lessons learned.

A company serious on promoting risk-taking behavior would best benefit if there is effort to coach employees on ‘smart’ risk-taking. Smart risk-taking is when there is a probability of high payout for a low investment, with a larger probability than otherwise of failure. Lessons on risk-taking should include limiting the downside, and catching failures early in the cycle. It is important to ensure failure in such situations is not catastrophic to the project.

In general, the Indian culture is one of risk aversion through promotion of taking well-trodden path in most life’s situations (of course there are many exceptions). It will take the managers in this industry a lot of effort and commitment to overcome our natural instincts of need for guaranteed success and drive innovation of the scale that is needed to fuel the growth in this country.

The author is Vice President of Engineering and Head of India Operations, McAfee Engineering Centre, India. He can be reached at Sridhar_Jayanthi@McAfee.com
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