Step One: Define risk.
Step Two: Examine your attitude towards risk.
Step Three: Analyse the ability of the organisation to handle risk.
Step Four: Minimise each risk’s exposure or downside.
Step Five: Quickly recover from the negative impacts of the risk.
Step Five and One-Half: Learn something, so you can accept even greater risk with confidence.
Your goal in Step one is to get the leadership body to arrive at a consensus on a mutually acceptable definition for both risk and risk taking. A well-conceived consensus will almost always be a balanced view.
This is done by the firm’s leadership team consisting of all the executives and key decision makers in an atmosphere that is conducive to creative thoughtfulness and open, honest dialog.
How to Gain Consensus
Step One: Individually, write out the phrases or terminology each member of the group would use to define the word risk. In other words complete this sentence, “Risk is ...”
Step Two: Ask each person to read his or her definition out loud to the other members of the group. Set the rule that no one is allowed to criticise or comment on any person’s definition. It is important to listen to the many versions in order to find common ground. I suggest taping each handwritten sheet to the room’s walls.
Step Three: Ask ...