Managers Need To Know How Do You Deal With Risk?

Managers need to know how comfortable they are with risk
Managers need to know how comfortable they are with risk
Image Credit: Photo by Yeshi Kangrang on Unsplash

In a perfect world, a manager would have all of the knowledge, manager skills, and manager training that he or she needed to have when it came time for them to make a decision. With this information they could be comfortable that the decision that they were making was the right decision. However, as I’m pretty sure that you are well aware of, we don’t live in a perfect world. What this means is that we have to make decisions with limited information and that means that we need to learn how to deal with risk.

How Much Risk Is There In Your Life?

As managers, one of the key questions that we need to be able to ask ourselves is just exactly how much risk is there currently in our lives? This is a critical question for us to be able to answer because the decisions that we make don’t just impact us. We have to realize that our decisions are going to impact the members of our team and that means that we’ll be taking chances that could have a negative impact on both their careers and their incomes.

In order to get a handle on just exactly how much risk there is in your life, the first thing that you are going to want to do is to conduct an inventory of the risk in your life. The goal here will be to catalog the things that you are doing that contain uncertainty and what potential dangers your decisions regarding these issues could hold. What you want to be looking for when you do is this is some sort of a pattern in how you deal with risk. Ask yourself if you tend to make bold decisions, only allow yourself to take small risks, or do you step back and play it safe when it comes to facing risk. The reason that you want to create this inventory is because if you don’t know what your current risks are, you don’t have a meaningful basis for deciding your future capacity for additional risk.

Get Some Good Advice

One of the reasons that so many of the decisions that have to be made are risky is because of what we don’t know. We make decisions based on the experiences that we’ve had and the knowledge that we’ve been able to collect over the course of our career. When we encounter a situation where we are faced with having to make a risky decision, we’d really like to be able to find a way to reduce the amount of risk that is involved.

It turns out that there is a way to make the decisions that we have to make less risky. What we really need is a good sounding board – someone that we can talk to who will be willing to give us honest feedback. You may already have this if you have a strong support network. If this network exists for you then it is easier to take risks because you can run them by your resources. You can think of this as a form of team building. When you do this you can be confident they will give you the reality check that you need.

How Do You View Risky Decisions?

It turns out that when we are faced with a situation in which we need to make a decision that contains risk, we may incorporate some of our personal bias into how we go about making this critical decision. As an example, some managers tend to be pessimistic with their predictions, while others are overly confident. What you are going to have to do is to identify how you view the situation in order to get a sense of how you want to approach risky decisions.

Your reason for doing this is to change how you go about making risky decisions. As an example, if you tend to be overly optimistic, by realizing that trait you can take a step back and reevaluate a situation, or seek a second opinion. Conversely, a pessimistic viewpoint could cause you to perceive decisions as riskier than they actually are, causing you to potentially miss opportunities for your team.

How Do You Sleep At Night?

Managers need some sort of metric in order to determine if they are getting ready to make the right decision when it comes to dealing with risky issues. One such way that you can have a better chance of making the right decision is to spend some time thinking about the question that you are trying to answer. If it is going to disrupt your sleep, then it may not be the best choice. If you find yourself in this situation, then you might want to think it through more carefully.

What All Of This Means For You

The purpose of contemplating these questions is that they should help you understand your overall comfort with risk as well as patterns in your decision-making. What you need to consider is what is the worst that could happen? Am I okay with this? What is the potential upside? What happens if I don’t take this chance? What will I learn from this experience?

If upon evaluating the four areas above you determine you are not well-positioned to deal with the uncertainty, then you may want to rethink how you approach decision-making. That doesn’t mean you can’t take chances and make mistakes. Just be sure you evaluate every decision on an individual basis. By analyzing your comfort with risk, you’ll be better equipped to avoid making decisions that could negatively affect your team.

– Dr. Jim Anderson Blue Elephant Consulting –
Your Source For Real World IT Management Skills™

Question For You: How many risky decisions do you think that you could deal with at the same time?

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What We’ll Be Talking About Next Time

As all managers have probably realized by now, the millennials have arrived. That younger generation of workers are moving into the office at the same time that the baby boomers are starting to move out. The arrival in force of this new type of worker is going to cause some fundamental changes to occur in the workplace. As a manager, you need to have the manager skills to be ready for the changes in tools, workspace, and culture. Do you know what is getting ready to happen?

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