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How do creative leaders manage risk?


Our perception of creative entrepreneurs as bold, courageous risk-takers may not be entirely accurate.


Popular culture romanticizes the stubborn visionary, so admirably confident in an idea that she "bets the farm" to pursue her passion. That's sometimes true, but the founders who carefully manage risk and progress with caution tend to be more successful.


As is often the case, moderation is key. That's why founders at companies like Warby Parker, Apple, and Google all kept their day jobs while they started their businesses, unsure whether their ventures would pan out.


Making things more complicated, every individual has a different perception and perspective on risks. For example, when I announced that I was taking the leap in to self-employment, I was by turn told that I was either smart, crazy, lucky, and/or (un)likely to succeed. The same risks and rewards were perceived differently by my friends, family, and colleagues.


Being fairly averse to risk myself, I have often relied on the Teddy Roosevelt quote popularized by Brené Brown in her book Daring Greatly:

It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; ... who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly.”

First attempts present their own special flavor of risks and fears: sunk costs, professional embarrassment, and poor timing to name a few. How many leaders have been so intimidated by these fears that they never took their first step? Ironically, the daunting scale of first attempts can blind us to the experience and insight they provide to subsequent attempts. In other words, we mistakenly perceive our first try as our last and only opportunity, forgetting that successful innovation is iterative.


There is no shortage of organizations that purport to promote creativity and innovation among their employees, but rewarding outcomes is less important than encouraging people to take a chance on their ideas. Researchers at the University of Oklahoma identified the organizational climate factors most predictive of creative performance by analyzing data from over 14,000 employees. They found that organizations with climates supportive of (reasonable) risk-taking are significantly more likely to facilitate creative performance than more conservative organizations. More importantly, creative achievement is more strongly related to employee flexibility and freedom to take risks than expectations for rewards and recognition.


Creative achievement is more related to employees' freedom to take risks than their expectations for rewards and recognition.


In the 12 months since starting this venture we have surely stumbled, but the rewards have been worth the risk. We're performing work that our clients find valuable and we find meaningful. Yet, we know we have room to grow and improve.


This is the first of what we expect to be a regular cadence of posts in which we'll share the latest research and thinking on the psychology of creativity, empathy and design.


Have an example of your own creative risk-taking? Tell us about it in the comments!

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