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How Do I Manage a Risk-Averse Team Member?

Updated: Jul 9, 2019

Simply stated, minimize risk. The safer the environment, the less risk-averse an employee is. While eliminating all sense of risk in the mind of an employee is impossible, creating a safe space causes the reduction of trepidation and increase of innovation.

Risk-averse is a term of art we’ve borrowed from the finance world. To the investor, it means one who is more tolerant of lower returns with a known risk rather than higher returns with unknown risk.

We Are All Risk-Averse

To be clear we ALL are risk-averse; it’s simply a matter of degrees. Everyone has a point at which the potential gain is not worth the risk, wherein we're risk-averse. So, the first point to note is that risk aversion is a product of your vision of the world. What is being practically prudent to one person, is being risk-averse to another. That said, there is much we can do to ease the risk aversion for those in our charge.

Continuing with our definition of risk-averse, our main focus as managers should be on minimizing the risk side of the equation. Granted there is little we can do to influence an employee’s vision of the world; however, we can play a significant role in diminishing the sense of risk they perceive.

Whether you realize it or not, your actions are the most significant factor affecting a team member’s willingness to take risk. If you grasp it or not, as a supervisor, your voice is much louder than you realize, particularly for the timid and more risk-averse (I’ve had to learn this lesson the hard way). Consequently, even the subtlest of rebuff or sarcasm can leave an employee cowering in the risk-averse corner.

Whether you realize it or not, your actions are the most significant factor affecting a team member's willingness to take risk.”

Our jobs as leaders are simple; influence the environment so that all team members meet their potential. The most powerful way to do this is to create a safe place for them to take risk with measured and appropriate concern, not a sense of fear.

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