How to Encourage Employees to Take Risks and Learn From the Results

Risk is inherent in starting a new business and taking it to the next level. But not all employees see risk as an opportunity; without the right encouragement, risk can become an obstacle rather than a source of innovation. As your company grows, it’s useful to create a culture that rewards (calculated) risk-taking. Here’s how to foster that approach and benefit from the results.

Bring on employees with entrepreneurial mindsets

If you’re a new business, make risk a foundational part of your culture through hiring. “The first 10 employees define a company’s culture, and the next 90 solidify it,” said Frederic Kerrest, COO and Co-founder of Okta. “[The] culture that those first 100 hires create will live on as your headcount grows to 500, 1,000, and beyond.”

Configure your hiring approach to find those who are comfortable with ambiguity and willing to try new things. This might mean looking beyond traditional resumes and using skill assessments or job trials to see how someone approaches a role. Use the interview to understand more about a candidate’s approach to problem-solving or exploration.

Established companies can offer their existing teams entrepreneurial training. There are dozens of courses available to help develop an entrepreneurial mindset. Offer this professional development option to anyone looking to grow in their career.

Normalize failure

Some risks won’t pay off — and that has to be accepted, or even celebrated. “The more that managers can normalize failure rates to align the team’s perspective with the reality of actual achievement and to eliminate fear, the easier it will be to innovate,” wrote Sara Critchfield, Founding Editor of Upworthy.

Failure can cause team members to feel discouraged and play it safe. But playing it safe doesn’t net the big results you may be hoping to achieve. Avoid letting failure become a sign of something wrong and celebrate it as progress toward a bigger goal. Reframe failure as a data point along the way toward success.

[Read more: Stripped Beauty Founder: Ask Questions and Take Risks]

Set a few boundaries

There’s a difference between taking a risk and being reckless. You don’t want employees jeopardizing your business in the pursuit of being risky. Transparent and clear communication can help guide your team on how to move forward in a calculated way.

“Establish guardrails regarding the size of the project, the budget, or the timeline. Set milestones for reporting back on the progress they’ve made and what they’ve discovered. And define parameters for the circumstances under which you should kill the project,” wrote Kerrest.

Parameters like these also build confidence among your team as to what you expect and reinforce risk as a priority for your work culture.

Create a safe environment

Along with normalizing risk, it’s important to create an environment where failure is not punished. Treat failure as an opportunity to learn for future endeavors. Help employees figure out what went wrong and try again. When someone pitches a big risk, ensure they have the resources they need to bring their vision to fruition. The worst-case scenario is a risk that doesn’t pay off and goes unexamined.

[Read more: Should You Go For It? How to Decide When to Take a Risk as an Entrepreneur]

Encourage creative thinking

The right mindset can make all the difference. “Research has shown that the more playful a person’s mindset is, the more creative breakthroughs they have,” wrote Kerrest. “When you task people with trying something new, put more emphasis on exploration and discovery, rather than on producing a specific result.”

One approach is to schedule creative time during the week. Recruiting firm Robert Half recommends allowing employees to spend an hour or two during the work week coming up with new ideas, brainstorming with others, or testing theories. Alternatively, you can make testing part of your business practice: Encourage teams to push themselves to pitch new ideas at every opportunity, even if they have a preferred option.

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