How Understanding Risk Can Help Your Team Perform

I received an email last week from a client who is thinking about the impact that risk can have on team performance and dynamics. OLYMPUS DIGITAL CAMERA

Performance and Risk

I know you usually think of risk and reward going together, but as I was reading the email from my client a bell went off in my head. Reward is an outcome of risk, not a partner in the dynamic interplay of teams.

Risk and performance, however, go hand in hand.

Risk brings with it, as change does, a certain emotional tone and tenor. We each have a tolerance for risk. As that tolerance becomes challenged, our emotion, anxiety, and fear can all increase. The more safe we feel the less risky something is to us. Nothing new here, but hear me out on this relationship between risk and performance.

Let's say that someone on the team is driven by risk. We would call them carefree. Someone else on the team is risk averse, and we call them wary. Now the team has to make a decision on a product or how to put a presentation together. The carefree person wants to go for it. The wary person wants to hold back. Depending on team dynamics, the team may find themselves out of balance or even stuck. As a result, emotions rise, people stop understanding each other, and often begin looking for blame.

The stuck feeling the team is experiencing has nothing to do with talent or skill. The team is not performing in the moment because they all have a different tolerance for risk.

There are 8 different types of risk profiles that people present with. Understanding these risk types will help leaders to better navigate team dynamics and maximize the risk profiles of each member of  your team.

8 Risk Types

  • Excitable At the root of this risk type is impulsivity and an attraction to risk, combined with distress and regret if things go wrong. This type tends to be passionate and to vary in their moods between excited enthusiasm and pessimistic negativity. Such people are both frightened and excited by their impulsiveness and are likely to respond emotionally to events and to react strongly to disappointment or the unexpected. Depending on the mood of the moment, they may enjoy the spontaneity of making unplanned decisions.
  • Intense Those who fall into this dimension tend to be anxious and worrisome. People in this risk type tend to expect the worst, and tend to be highly-strung and alert to any risk or threat to their wellbeing. They are emotionally invested in their decisions and commitments and take it personally when things don’t work out. They tend to be very passionate about things, but their mood can vary dramatically from day to day.
  • Wary Characterised by a combination of self-discipline and concern about risk, these are cautious, organised people who highly prioritize security. They are likely to be alert to the risk aspect of any investment opportunity before evaluating any potential benefits. These people have a strong desire to know exactly what to expect, and, as a result, may find it difficult to make decisions.
  • Prudent Those in the prudent risk type have a high level of self-control. This type is organised, systematic, and conforming. Conservative and conventional in their approach, such people prefer continuity to variety and are most comfortable operating within established and familiar procedures.  Generally very cautious and suspicious of any new ventures, they may find reassurance in sticking with what they know.
  • Deliberate Those in this category have high levels of calm self-confidence combined with caution. This type tends to be unusually calm, even in situations where most people would be prone to worry or panic. At times, they may seem almost too accepting of risk and uncertainty. However, they are often well balanced by a desire to do things in a planned and systematic way. Because they are highly organised, compliant, and like to be fully informed about what is going on, they are unlikely to walk into anything unprepared.
  • Composed This type is cool headed, calm, and unemotional, but at the extreme may seem almost oblivious to risk. Their outlook will always be optimistic. These people take everything in stride and appear to manage stress very well. They are not particularly impulsive but are also not overly organized or systematic.
  • Adventurous At the root of this risk type is a combination of impulsiveness and fearlessness. Extreme examples of this type are people who have a disregard for custom, tradition, or convention. They are seemingly oblivious to risk. Their decision-making is likely to be influenced by both their lack of anxiety and their impulsiveness.
  • Carefree Those in this category dislike repetitive routine and do not like being told what to do. Such people may seem excitement seeking and, in extreme cases, reckless. Lack of attention to detail and preparation may cause their intentions and objectives to seem vague.  Their impatience, impulsivity, and distractibility might leave them exposed to hasty decisions.

These risk types all come from an exciting new assessment that is published by Multi-Health Systems called Compass Risk Type. The tool is designed to assess the individual risk type of each person on a team and then give the team a picture as a whole. As we design workshops around this Compass Risk Type Indicator it is always interesting for a team to look at a current issue they face, and each others Risk Type, to work through possible solutions.

There is potential for risk in almost everything that we do, and there are many different factors that influence a person’s readiness to take a risk at any particular moment. As leaders, we must be aware of the way those on our team interpret and respond to risk, beginning with ourselves.

Homework

Examine your risk type from the above list. Then think about an important relationship in your life; maybe a spouse, child, or business associate. Are you stuck anywhere in the relationship? Is the source of the stall because you each have a different approach to risk?