It was the flub heard round the world. There was Adele at the Grammys, her every move being watched live by 24 million people. But as she began her tribute to George Michael, her voice was noticeably off key. That's when she did the last thing anyone would expect from a megastar with a brand to protect -- Adele stopped and admitted she sounded bad.
Apologizing profusely, she started over. The second version was heartfelt and perfect. Yet, it was her willingness to take the risk of stopping the song that turned a mistake into a star turn.
Companies can learn a lot from Adele. The ability to take risks is challenging many businesses right now. With today's pace of change, it's either innovate or get left behind. But most businesses don't have the risk-taking nerve of a startup -- or even a singer.
At the places where the majority of us work, the first reaction to change is what does that mean for me and how will it affect my group's operations or business model? Risk aversion runs deep. But there are ways to manage the process so everyone can become more comfortable with risk, and reap big benefits as a result.
So how do you fight for risk and make way for it?
1. Get buy-in from the top
If you don't have executive support, you'll never clear the many hurdles of implementing change. But to get buy in, you need to set expectations. By establishing a guardrail for risk, you can negotiate how much of it your organization is willing to take, and get early approval for how far you're going to go.
For example, at AARP, we train key decision makers to be more risk tolerant by setting standards on risk tolerance. We set expectations of the board, for instance, explaining that out of every innovation that emerges, 25 percent will die before they get to concept, and another 25 percent will die before getting to market. Of the rest that do get to the market, only about 10 percent will make it.
2. Bring in policy makers early
You have to bring the risk averse and the innovators together at the very beginning. This isn't what innovators want, but you have to get policy makers involved early on.
Invite policy makers in so they can listen and have their say. Not so they can say no, but so they can identify risk and give you options for how to overcome that risk or game out scenarios for how much risk is tolerable.
The flip side--trying to convince policy makers after everything is fully baked so that they only focus on the immediate risk--is a tougher sell. Once you get policy makers on board, they're more willing to understand the payoff of taking that risk.
3. Encourage innovators
You tame risk aversion by mitigating risk. By encouraging internal innovators to incubate a series of "little bets" that have lower investment costs but higher aggregate potential overall, you can rapidly test ideas and get the innovation ball rolling. Promoting this behavior enables the organization to learn quickly from failures and pivot smartly (and cheaply) to get to success--turning risk aversion to risk taking.
At the same time, focus on shifting the culture to embrace mistakes. When you fail, you learn and figure out how to get better, what market to tackle instead. Share your stories. Talk about what you learned from your wins and your mistakes. If you don't, it doesn't matter how cleverly you work to encourage innovators. You aren't going to get buy-in. At established companies, everyone is scared of taking risks because they're worried about the repercussions if they fail. People will stop taking risks if you don't embrace failure.
So what's the key take away? Encourage lots of smaller but smarter bets and publicly celebrate, at the highest level, the learnings from the mistakes you make. You will see smart risk taking behavior soar.