Why We Should Reward Risk-Takers, Even When They Fail

By Monica O'Brien | Published: February 17, 2009

I just noticed I hadn’t written in a week. Well, actually someone sent me a message. But whatever. Either way, I need to write.

It’s hard to write a blog post today though, mostly because my last blog post did well. And now I want the blog post with lots of comments to be at the very top of my homepage, because someone important might be watching and I want to give a good impression about how interesting and smart and likable I am.

But today I said to myself, this is ridiculous. My most recent success is holding me back from generating more successes. I’m afraid of failure. We all are to some extent – and here, I’ll prove it.

Which is worse – someone who loses $1 million for their company because they made an informed decision with a calculated risk, or someone who loses $1 million for their company because they missed a profitable business opportunity?

Economically, these outcomes are the same. But in our careers, we are comfortable with one decision and we would most likely get punished for the other. Isn’t that the opposite of what most companies want? The curse of the risk-taking careerist is that you are only rewarded when things turn out well. And hindsight is 20/20 – Your once supporters all of a sudden “knew” it wasn’t going to work from the beginning. How convenient for them.

Worse yet – there is some limit to the number of mistakes you can make before people start to question your judgment. Like if I wrote 5 bad posts in a row, eventually some people would unsubscribe. It’s a scary thought – you could have tons of successes negated by just a few failures. Amazing, really. All because you were a risk-taker.

So what? Life sucks. Right?

The question is: who do you want to be?

Are there good decisions with bad results that damage reputations unnecessarily?

Are there bad decisions with lucky outcomes that get rewarded unjustly?

Is it worth changing our thinking about what’s important – focusing not just on achievements, but process?

I hope so, because making the comfortable decision keeps you from reaching your potential. Comfortable is doing the same exercises over and over again and not getting any thinner. It’s the person who won’t speak in class unless she’s called upon. It’s the easy road, because it only takes you to destinations you’ve already been.

Will your company be the one that rewards risk-taking – that pushes your employees beyond their comfort levels and the status quo?

I want to be the risk-taker, and I want to work for someone who appreciates how courageous that want is. So I’m writing the blog post. It might be horrible, or it might be better than the last. I made my choice today, but will I make it again tomorrow?

Risk-taking, after all, requires real commitment. You have to be in it to win it.

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  • Great post. I worked in an industry that "claimed" they wanted you to take risks - but when you did and they went pear-shaped it wasn't pretty. When one called it right, they were revered and rewarded. When called got it wrong they were "on their own" and often shown the door. This had the effect of frightening most into 'playing it safe' and we all know that's no fun!! I do believe there are employers out there who genuinely look for  employees who have the ability to take risks... it's just finding them is the tricky part!
  • Rosey,

    I think there are so many industries that claim they like risk-takers. The biggest distinction I would make is a calculated risk-taker, where the imperfect information she has makes the risk appealing, vs. a risk-taker who just uses her gut to make decisions. It's so easy to incentivize your employees to "play it safe" through compensation and performance reviews. Thanks for the comment!
  • Calculated risk is, in my opinion, one of the foundations of successful business, and a full, rich life.  Every business started as a calculated risk taken by its founders, and it seems that fact is often tossed by the wayside as our profits grow and our markets expand.  Some of my best, and admittedly worst, times in both the public and private sector have come when I finally just threw my hands up and "went for it."  As long as you learn from the experience and, as you point out, don't systematically repeat your failures, taking risks and learning from the outcomes can only make you a more effective employee and a more well-rounded individual.
  • Robby,

    One of the questions I struggle with is how to know when you've crossed the line, or when you're about to - when one more mistake is going to cost you. It's a struggle for everyone in their careers, especially when different tactics produce results in various situations (some people like it when you're straightforward, others expect you to soften your message, etc.). So the discussion could actually be viewed on a wider scope, not just for risk-taking, but for managing your actions in general.

    I'm more the "ask for forgiveness rather than permission" type. I like to "go for it" as well. Sometimes it doesn't work out, but it's makes life more challenging and interesting... even when it gets me in trouble. :)
  • Obviously, goog provocative post!

    I think it comes down on who is a particular person, how often he or she takes risks and what is the motivation behind.  I think risk taking is good, but  you have to do in a "safe" way. Just like martial arts are a pretty brutal sport, where you can get injured any second - but there are principles, gear and other stuff that allows you to risk yoursel and practice, but in a "safe" way.

    Some unsafe example of risk takes are those guys who move from one MLM to another, or a CEO who keeps going with their gut without getting any data, or sales rep that goes that keeps jumping from one prospect to another without really putting an effort to close at least one prospect.

    I think the best approach to risk is from "Good to Great" face the brutal facts, but retain faith that you will prevail in the end, regardless of the difficulties.
  • Roman,

    I agree with your last part. I don't think people should take unnecessary risk, based on not gathering enough data, not thinking decisions through, etc. But it's hard to "safely take risks" sometimes. One would argue maybe it's not so risky if it's safe :)
  • I totally know where you're coming from, Monica. I especially related to: Your once supporters all of a sudden “knew” it wasn’t going to work from the beginning. How convenient for them. As painful as that is to go through (and, it is painful), it's difficult to grow without some level of risk. And, if you're not growing , you've settled. Settling, for a lot of us, is the absolute worst. Thanks for the inspiration. I want to take risks with you.
  • Angela,

    I'm so scared of settling! Maybe that's what distinguishes real risk-takers - they would rather take the chance that everything could fall apart and they could lose big - because they are that afraid of settling.

    Keep me updated on how your risk-taking goes :)
  • Nice post Monica. I have been a fan of your site for a few months now. yiou have inspired me to start blogging. I connect with your posts because they are honest and follow your stream of conciousness. This post is extremely relevant. My favorite quote that goes along with that theme is " Why not go out on a limb...isnt that where the fruit is". Your post actually just made me think of the job postings that I have been reading lately that ask for the applicant to have an entrepreneurial spirit...if only they knew what the entrepreneurial spirit really was..

    Brian Citizen
  • Brian,

    Haha! I hate those job postings that ask for an "entrepreneurial spirit." I don't think most companies want an entrepreneur, even at start-ups. If a start-up wanted an entrepreneur they would just get another founder. Generally, founders want people who can help them execute their vision. There is no time for the entrepreneurial spirit, at least the way I think of it.

    I also wonder if "entrepreneurial spirit" is another way of saying "work as many hours as we ask you to, well beyond 40." I mean, it's a good way to turn a negative need into a positive one when you're writing a job description.

    Also, thank you for your continued support of my blog, and I am glad I inspired you to start your own!
  • Love this post, and love taking risks. Sometimes I almost feel like I have to take the crazier, riskier option when faced with a decision because it's so much more interesting than whatever the "safe" route is.

    Also, you just reminded me that I haven't blogged in like... 2 weeks. I'm going to get on that soon...
  • Nisha,

    I hear you! I like being risky, even though I have to force myself sometimes.

    And definitely happy to remind you to update that lovely blog of yours... I'm glad someone reminded me to update - we all have to keep each other motivated :)
  • Monica - best line? 'Question is: who do you want to be?' Been around the block enough to know who I don't want to be and I know for sure, especially today and moving forward - you don't want to be the guy in the corner saying nothing. You don't want to be the woman who won't volunteer to work on a project because she is afraid she will say or do something to put her job in jeopardy. When you are smart enough to get the job, you are smart enough to calculate between a bump in the road and a sink hole. You have to be able to get to the the risk reward calculation and get to it quick - what happens if I take the risk, and what happens if I don't. Because either way there are consequences - but the question is who do you want to be - the risk or the reward?
  • Gilbert,

    Great points. I know who I don't want to be - but getting to who I want to be is tough! The hardest part is calculating the risk correctly - I think that takes experience + quant. and logic skills - both of which are difficult to develop, really. For young people I think this can be hard. But I guess that's the point of growing up - learning to improve yourself at every step of the way.
  • I think that we should take risks only if we are dissatisfied from something. If everything in your life is ok and you are not bored from life why do you want to take risk.? Why  do people constantly wants more? Isn't it the reason that natural recources becomes less.  Many  people want to be succesfull in life,  but what does this mean? If you need more adrenalin you can practise extreme sports like bundji jumping, it is not necceseraly to invest in stock exchage. 
  • P. Simeonov,

    That's a good point. I was mostly speaking from a leadership and career standpoint. Of course, going to the extreme with risk-taking should never be rewarded.
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