Leadership Trait Risk-Taking: Why and How to Build It

Great leaders know that they have to be willing to take risks if they want to develop new ideas.

Research has shown that risk-takers are heavily endorsed, especially in competitive settings. They are perceived as more dominant and prestigious.

What is risk-taking in leadership?

Risk-taking is any behavior controlled consciously or unconsciously, but whose outcome or possible benefits or costs for the physical, economic, or psychosocial well-being of the person taking the risk or others are unknown.

Famous leaders who were risk-takers

Risks often pay off. Here are some famous leaders who were risk-takers and had wide success with it.

Henry Ford

Henry Ford was unconventional and risk-taking like Ford. He promised to fund this enterprise and not interfere with production. Ford created a new assembly factory to allow him greater control over the Model A.

Steve Jobs

Steve Jobs took risks to build his legacy. He quit college to travel to India for his faith. At Apple, he invested in the iPhone and other new technologies, which success was a huge unknown.

Thomas Edison

Edison invented the incandescent light bulb and the phonograph. He helped establish America’s economy during the late 1800s industrial revolution. And he patented 1,000 innovations throughout his lifetime.

Winston Churchill

Churchill was an independent thinker from childhood. He was a great communicator, risk-taker, and opportunist who led the Allies to victory in World War II.

John D. Rockefeller

Rockefeller was known for his thoroughness, was also a risk-taker, and borrowed $20,000 from his father to start the business. He was very frugal, recording personal spending in a ledger.

The importance of risk-taking in leadership

Great leaders know that they must be willing to take risks to be creative. As a result of taking risks, leaders are more likely to get the following benefits.

Risk creates opportunities

It’s important to take risks because you can make a whole new set of future opportunities. You might finish what you set out to do, but you might also open doors you hadn’t even thought of.

Customers’ needs are constantly changing. Because of this, businesses should always be making progress. Leaders who accept risk are a cost of opportunity and then make sure everyone in their companies has the same mindset. This helps them reach their goals and be successful.

Risk-taking helps you think creatively

Research shows that risk-taking and creativity are linked. It is important to take risks to be creative.

Taking a risk lets you experience something new. Risks help tear down your expectations, ideas, and beliefs. Risks push you to adapt and adjust your behavior. Adapting requires creativity and out-of-the-box thinking.

Traveling is the best example. Imagine going to an unusual, unfamiliar place. Unfamiliar areas where you don’t speak the language. You decide to divert from a major tourist spot to explore new locations. You get lost exploring.

Since you opted to travel someplace new, you must be creative to get back to your hotel.

Risks help achieve goals and ambitions

Success takes time. It comprises aligned risks with your aims and desires.

Success isn’t immediate. They prepare and make measured choices to reach their goals.

This stepping ladder involves taking risks, however. These dangers needn’t be big.

For example, you don’t need to leave your work to become a stand-up comic. Daily choices and behaviors beyond your comfort zone might be considered hazards.

Try an open mic night at a comedy club if you want to be a stand-up comic but work 9-5. If you’re nervous, consider performing in front of family and friends.

Suppose this danger scares you; practice in front of your dog or a mirror. Whatever the danger, you must take it.

Risk-taking leads to learning

Risk-taking allows you to learn from your failures. Risk-taking means leaving your comfort zone. In strange settings, you may make errors. Making errors helps you learn and develop.

Mistakes may be expensive and frustrating, but they help you manage future stress better. Mistakes inspire creativity by prompting creative solutions to problems. Mistakes help you correct past mistakes.

Consider your risk and what went wrong. You’ll be able to anticipate and avoid this trap in the future. Some risks might not pay off, but a person who takes risks with optimism will always see failure as a chance to learn.

The key to business growth is being willing to try out new ideas. “Nothing risked, nothing gained,” as Michael Stelzner says. You will learn how to think and plan strategically by making mistakes. Keep in mind that not all risks are good, and when you fail, take what you can from it and move on.

How to build risk-taking traits

If you know you’d be better off taking more smart risks but can’t because you’re too lazy or worried, you can do a few things to help you take the kind of risks that can make your life better.

Be positive

Change can be scary, and taking risks means you don’t know how much will change. Instead of thinking about all the bad things that could happen, think about why you want to change your current situation.

For example, if you’re having trouble finding a good job and good friends in your current town, you might want to think about life in a new city. If moving could make your life better, it might be worth taking the chance.

Find ways to take on a little risk at a time

When you start something new for the first time, you might not want to put too much on the line. Instead of taking the biggest risk possible, think about small steps to get you to the same place.

Instead of quitting your job to start your own business, think about doing it on the side. Once it’s up and running, you might feel comfortable doing it full-time.

Develop a system for assessing risk

When thinking about a big risk, the first thing to do is list all the pros and cons. By putting the good and bad outcomes next to each other, you can decide if a risk is worth taking.

Get over your fear of failing

If you worry too much about what could go wrong, you might not take the risk that could take your life or career to the next level. If you can let go of your worries and think about the good things that could come from taking risks, you may find your inner risk-taker.

Stop putting yourself down

People have trouble taking risks because they aren’t sure they can handle the stress, responsibility, or pressure that comes with it. You can do more than you give yourself credit for, so stop doubting yourself.

If you’re thinking about taking a risk, remind yourself that you have a lot of skills and talents, so you shouldn’t worry about not being able to recover from anything that might happen.

Ignore negative feedback

Stop being the leader you think other people want you to be and start being the leader you want to be. If you don’t worry about disappointing colleagues or subordinates or making a fool of yourself all the time, it will be much easier for you to take risks in business and life.

If your colleagues or teammates are giving you negative feedback about your decisions, try talking to them. Say something like, “I want to do this, and it bothers me a lot that you think it’s a bad idea.”

You can try to explain your choices to other people, but don’t feel like you have to justify them to anyone but yourself. Think about who you want to share your big risk with, and once you’ve made your choice, talk to them.

Try to face what you’re most afraid of

Everyone has one huge fear that holds them back in life, like a fear of heights or public speaking. Don’t go out of your way to avoid facing your fears.

People have many different fears, and sometimes the best way to get over them is to face them. Try walking on a high bridge if you are afraid of heights. Make sure you stay on a safe path. Your fear may get worse if something bad happens.

If facing your biggest fear all at once seems too scary, choose a part of it to face. For example, you could drive near a tall bridge and look at it instead of crossing it or take a few steps onto it with the help of a friend. You don’t have to be alone when you face your fears for it to “count.”

Start small

There’s no reason for you to take a big risk right away. At first, taking small risks will help you get used to taking risks and give you the confidence you need to take bigger risks.

Taking one step toward the risk you want to take is another way to start small. For example, if you want to try to pitch a new product but are too scared, you could try to pitch an improvement for an existing product first.

Final Verdict

Great leaders aren’t the kind of risk-takers to blindly dive into any body of water, hoping they’ll survive. They are able to take calculated risks that play to their strengths because they are aware of their own talents and shortcomings. Leadership in the future will need people to be aware of themselves and to lead from a place of knowledge.


About the Author
Hi there, I'm James, founder of Melbado. I have over 20 years of experience as a leader and entrepreneur. Recently, I turned to leadership coaching and writing to pass on my knowledge to the next generation. If you have any questions or comments, please contact me via our contact page.

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