A strategic approach to risk-taking

It would be easy not to adapt to outside changes and pressures, but successful companies don’t lead the charge by staying still. They have to evolve, take risks, and transform in ways big and small. That can mean adapting to create a more cloud-centric product or completely changing your business structure or model. The key is to move forward strategically, even when taking risks and stepping into the unknown.

Leaders don’t need to take risks on a whim or follow fleeting trends. The most successful risks and adaptations come from strategic, goal-centric planning. Even the most far-flung risks can become attainable with the right plan and strategy.

The Importance of Taking Risks

Leaders face a tricky balance—they must be willing to take risks and challenge the status quo to move forward, but they’re also responsible for their company's and employees' financial well-being.

Taking calculated, strategic risks is a critical part of leadership, especially as the world of work moves forward rapidly. Research shows their employees perceive leaders who take risks more positively—even if they fail. Employees want leaders who are willing to make moves to change and update their company.

Aside from taking risks that will hopefully lead to rich rewards, risk-taking leaders inspire employees to be more creative and endorse organizational change. By taking risks for their company, leaders help build a culture of experimentation, innovation, and growth—all crucial characteristics for modern leaders and employees.

Setting Ambitious Goals

Ambitious goals support strategic risks. Even with countless outside forces and pressures, leaders need to think clearly about the risks they take and ensure they have goals and a strategy to back them up.

Ambitious goals drive a company forward, but only if there is a detailed plan to reach them. This mindset helps leaders think through the various challenges facing each risk and work with their team to create a comprehensive plan to overcome them. Without goals, risks feel more like a shot in the dark. But with detailed plans, risks become more manageable and attainable—even if they push the company beyond what it’s ever done.

For example, a company could take a risk by expanding into a new geographic area or accelerating its manufacturing processes. Those risks are unsupported and risky on their own.

But backed by goals, those risks become feasible and involve the entire company. Expanding to a new geographic area could involve partnering to be in 10% more stores in a new state or launching a marketing campaign in a new zip code. Leaders can then work with teams to create plans to reach those goals and make their risk successful.

Strategic goals unite leaders and employees around risk and show that everyone has a role to play. Leaders may set the vision, but employees put those plans into action. With the right goals and plans, they can work together effectively to overcome challenges and turn risks into success.

Great leaders don't hide from challenges. But they also only chase them with a plan. Setting goals is crucial to achieving risks and finding lasting success.

Written by

Michelle Kaiser
Michelle Kaiser

Senior Editor | CEO.com

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