What’s the best way to encourage a culture of entrepreneurial risk taking?
It’s true that as leaders we need to be more tolerant of failure, but only if it encourages more risk taking. It’s risk taking that drives a company to achieve new heights, not just tolerating failure – it’s not mistakes themselves that lead us to success. As leaders, we need to cultivate a culture where people understand what an intelligent risk is, and then feel comfortable proposing and actually taking it!
Risk taking is a behaviour, not a process. So, identify your best existing risk takers and encourage them to take innovation risks. The more people modelling innovation risk-taking behavior, the quicker and easier it will be to create that culture. It’s also good to have them acting as mentors to other members of your team, helping teach others how to take intelligent risks.
We need to create a safe environment for risk-taking; this means not punishing people who take smart acceptable risks and fail but supporting them. Helping them learn from their mistakes and then encouraging them to try again. These are the kinds of mistake we should tolerate, the ones that look to move us forward. At Hadean we use the phrase, if we are going to fail, we are going to fail forward. We win or we learn from the innovation risk we take. As long we make it safe for people to take risks, and as long as we try to move forward (win or learn) from it then we are ok.
Set up a structure (innovation hub) or event (hackathon) that puts a process around doing and reviewing innovation and rewards the best attempts. This will show that the organisation is serious about innovation and risk-taking.
What gets rewarded gets repeated, so we need to reward the best failures as well as success as this will send a strong message to the organisation. At Hadean we have quarterly Hackathons where each team presents back its ideas for how we get better via internal or external innovation. We want everyone to share their ideas about how we can change things to get better. We want to encourage people to have the confidence that innovation means change and change brings risk, but if you don’t take risks then nothing will change. And by default without change there is no innovation.
We need to bear in mind that risk-taking is a behaviour and although it can be learned, there will be some that won’t want to take risks, and we shouldn’t look to force them. Risk taking needs to be encouraged, it needs to be nurtured, and if you involve your people and encourage them to get involved, it will help create a safe environment for entrepreneurial risk-taking to occur.
When we can build this kind of culture, we will have an innovative organization which will push the limits of possibility. Examples of this at Hadean would be many of the game changing massively scalable distributed computing projects we have undertaken. This enabled us to demonstrate a live record breaking event with CCP games with over 14k connected clients – off the back of that success our technology has been adopted by the biggest game on the planet, Minecraft. Creating a novel approach to modelling the coronavirus spread, led to an engagement with the Francis Crick Institute and various academic institutes. And today we are now working with organisations to create city simulations involving millions of entities – something that just a year or two ago most people would have considered fanciful.
All of these projects seemed daunting and hadn’t been done before – but the upside was massive if we achieved our goal. The downside would have been to fail, learn and improve our tech. So either we win, or we learn and fail; but if we fail we fail forward.