up the scale of risk-taking, biting off slightly more each time, with you continuing to provide the protective um-
brella.

The analogy holds for the managerial world: You can let—indeed encourage—your subordinates to take
risks greater than they could personally afford to take without your backing. If they succeed, they will have
moved up a step in their development and will have produced more resources for you to work with; if they fail,
it will be on a modest scale where you will be able to cover their losses, both financially and psychologically.

ly you have several subordinates, each working at a level appropriate to them and manageable by you,
your odds of one of them hitting it big, are improved.

Of course, the first time you allow a subordinate to take a risk and then don’t support them if they fail,
your credibility is gone forever. Tolerating failure means just that—tolerating failure.

The alternative to this strategy is either to take all the risks yourself, which is dangerous because sooner or
later you are going to lose one, or to insist upon only sure bets within your span of control, an even more
dangerous stance over the long run given the pace of change currently challenging all organizations.

Adopting this strategy of pushing the risks downward in an organization means that, at every level, people
can be taking risks that are meaningful to them in size, yet not potentially disruptive to the organization because
the people above them are providing the umbrella.

Curiously—again from my personal experience—many organizations operate exactly backward from this
stratepy; the risks get dragged upward. Managers not only will not allow their subordinates to take risks that
they, the managers, can afford to lose; they will not even let the subordinates take risks that they, the subordi-
nates, can afford to lose. The thought of loss of any size is seen as such an obvious failure that “the people
upstairs” prohibit even moderate risks.

Perhaps that is true for you, too. How would you feel if your teenage child dropped $100 in trading for a
rare stamp that turned out to be bogus? Teenagers today can survive such a loss, and you certainly can, but
your first inclination might well be to chastise your child for stupidity.

Pursuing this strategy of pushing the risks down in either your family or your organization insures that
you are going to be continually surrounded by experimental projects, any one of which could go awry and cause
you mild embarrassment. But you also should be in a place to constantly observe a series of small wins that will
ultimately be the source of new, invigorating ideas for your organization's future.

You do not have to do this, of course; you can play it safe, which may be the biggest risk you will ever
take.

David P, Campbell
Smith Richardson Senior Fellow

For further information, contact the author through the Center for Creative Leadership, 5000 Laurinda Drive, P.
©. Box P-1, Greensboro, NC 27402-1660.

Reprinted by permission of the Center for Creative Leadership, Greensboro, NC 1984. From Issues and Observa-
fons, Volume 3, Number 4, November 1983, pp. 5-6.

 

oe D Roueche. Editor
February 1, 1985, Vol. Vil, No. 3
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INNOVATION ABSTRACTS is a publication of the National Institute for Staff and Organizational Development, EDB 348, The University of Texas at Austin,
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