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Risky Business

If you want to learn, grow and test things out in this world of uncertainty, you need to be able to take risks or make bets.

Our risk appetites, I believe, are very dependent on the context. In some contexts, I have a reasonably brave appetite for risk; in others, I am more risk-averse. As leaders, business and product owners, we need to learn to be comfortable and okay with betting on different things, not all of them working out, especially if we want to do product discovery or explore other ideas.

So, to move our businesses forward and create safety for the people making decisions, it's essential to know our risk appetites and have clear boundaries for the decision-makers.

What does safe to fail mean?

Many businesses talk about failing fast and being agile, but clarifying what 'failing fast' and 'safe to fail' means for those making decisions is essential.

Here's an example of safe to fail from my perspective:

I decided to take the risk of organising a very different kind of conference. I wanted to bring people from various industries and skill sets together and create a space for generative learning and creating but with no real fixed agenda. An unconference on steroids, if you will. It hasn't worked out so far, and I have postponed it twice.

I will take a last stab at it next year, and each time I postpone it, I learn something about what I'm doing wrong and how to attract people. When I first came up with the idea, I needed to decide and book a venue, so I needed to back myself. The venue cost wouldn't bankrupt me, but it's not an insignificant amount.

When I decided, I had to think about what was safe to fail. Is it okay for me to lose this money? Now I hear how that sounds, and nobody wants to lose money, but for us to take risks and make bets in uncertainty, we will have to be okay with not all of them working out all the time. If this works, it will be a fantastic conference that could lead to extraordinary and generative results for me, everyone there, and even socially. So, I decided I was okay with making that bet.

What are the personal risk profiles and biases of the decision-makers?

Leaders and product owners need to be clear for themselves and the business on what risks they are prepared to take. If the company or product needs someone who can bet on many different things and be okay with many of them not panning out, the business and product will suffer if they feel uncomfortable making those bets.

So, spend time evaluating different scenarios and understanding your tolerance for the risks needed for each. Do you need to be a bit more courageous or a bit more conservative in your approach? How does your appetite match with the business needs? What will allow you to be bolder if that is what you must do? What support might you need from your peers or leaders in the organisation?

What are the business or product constraints for risk?

The counter to personal risk profiles is, what is the business's capacity for risk? If you want the freedom to bet on many ideas, but the company only wants to invest in heavily validated products, then there will be a mismatch. That is why leadership needs to ensure people know the constraints within which they can act.

I was facilitating a meeting for product and project managers the other day, and we spoke about risk; one of the biggest things that came up was knowing the business's capacity for risk.

What is the business okay with, and what principles can decision-makers use?

Some examples:

We have no appetite for betting on new things that might not work, so we will only invest in validated and tested product development.


We are okay with all risks that will cost the business less than $ 100,000 and have a probability level of less than 40%.

These examples illustrate how leadership can establish enabling constraints, allowing decision-makers to act more swiftly and confidently.

As levels of uncertainty and rates of change increase, we need to foster environments where product owners and leaders can feel safe to take the risks they need to to help the business thrive. And so, we need explicit enabling constraints and awareness of our own biases.

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