Being Risk Averse: Looking at the Good and the Bad - dummies

Being Risk Averse: Looking at the Good and the Bad

By Dawna Jones

Do you see risk as something to fear? Do you use it as a lens for assessing potential health and safety issues? Does being on the risky edge inspire you to dive deeply into bold innovation? The traditional definition of risk focuses on loss, injury, and destruction.

No wonder being risk averse sounds like a solid plan . . . and it is when applied to health and safety decisions. Not putting people in danger is a very good thing.

To address health and safety issues, you can deliberately seek out potential risks to your employees’ or customers’ health and safety. Be aware of pressures to take shortcuts in order to deal with budget restraints or to meet production or sales targets, for example.

By preventing risks to health and safety, you become more aware of places where management pressure hijacks the sensibility of decisions. In this case, risk aversion helps you make a better decision.

But you can be too risk averse. If the conditions around your company change but your thinking doesn’t, you’ll fall into the trap of relying on tried and trusted principles that no longer fit the current reality. Being afraid to make a mistake is a form of risk aversion that, in a climate of rapid and unpredictable change, is exceptionally risky and puts your company at the very back of the innovation curve.