The Dangers of Playing it Safe
Introduction
We’re all aware of the inherent dangers in taking risks. We’re generally less aware of the dangers in playing it safe. In a business context, that’s because there used to be some merit to playing it safe –– to having ambition but pacing oneself, choosing a slow, incremental trajectory over a fast, steep one. As Doug Sundheim, author of Taking Smart Risks: How Sharp Leaders Win When Stakes are High, writes in Harvard Business Review: “The dangers of playing it safe aren’t sudden, obvious, and dramatic. They don’t make headlines. They…are hidden, silent killers.” [1]
Without risks we wouldn’t have put planes in the sky or man on the moon, nor have any of the everyday innovations we take for granted. But for each of history’s bold risk-takers, there were many more steady, risk-averse contemporaries sitting on the sidelines. And for a long time there was nothing wrong with that. As Steve Dennis, a strategic advisor and author of Leaders Leap: Transforming Your Company at the Speed of Disruption and Remarkable Retail, writes: “A heavy focus on business optimization and continuous improvement was eminently sensible. Until it wasn’t.” [2]
Things have changed.
Dennis writes of the large-scale disruption we have seen in recent years. Businesses like Airbnb, Netflix, Uber, and OpenAI did not simply emerge as major players in their respective industries. They totally reshaped how those industries functioned.
“Many brands that moved far more cautiously, or that are currently slow-walking their transformation efforts, have dramatically increased their risk of irrelevance,” Denniswrites. “Or even set themselves on a path to extinction.” [3]
Such companies tend to follow a path of what Dennis calls “infinite incrementalism”. Essentially, every year these companies would offer a slightly better version of what they had always done. That’s no longer enough. Not with the speed of change we’re accustomed to in today’s world.
Rishad Tobaccowala, the former chief digital officer of Publicis Group and author of Restoring the Soul of Business, says that in recent years we’ve moved through three distinct “Connected Ages.” [4] Each “Connected Age” changed how we connect and do business. We went from e-commerce to smart devices, to 5G, VR, the cloud, and AI.
The state of business today is unrecognisable from what it was twenty years ago. And who knows what it’s going to look like twenty years down the line? No one is quite sure and there are no guarantees. But the idea that one can just drift along at a snail’s place without being left behind feels increasingly naive. As the landscape shifts, businesses must shift with it.
Dennis concludes, “Faced with constant and accelerating change, doing what we’ve always done but just a little bit better may feel safe, but it is often the riskiest path we could possibly choose.” [5]
Rethinking our relationship to risk
To stop playing it safe, companies need to reassess their relationship with risk. Of course risk can bring failure. (As we’ve established, playing it safe can too.) But those failures don’t need to be failures. Through a shift in mindset, they can instead be viewed as opportunities for learning.
“If we are open to taking more risks, it’s more opportunity for diverse experiences and more opportunity to learn and grow as individuals,” says Jon Levy, author of The 2 AM Principle, speaking to Forbes. “It isn’t the success or failure, it’s who you become in the process.” [6]
This approach is in line with that of Microsoft CEO Satya Nadella. Nadella moved Microsoft from a “know it all” to a “learn it all” culture [7]. That meant that rather than condemning staff for taking risks that failed, he would reach out to congratulate them after a “failure”. What he understood that many don’t is that you can’t simply praise the risks that work and condemn those that don’t. You have to create an environment in which your team feels comfortable failing and doesn’t fear facing recriminations if things don’t work out. Such an approach can shift the mindset of the whole company.
Any cricket fans who witnessed the ‘Bazball’ revolution of the England team these past few years will have seen this approach in action. There was no change to personnel, just a change to messaging. If a player got caught on the boundary in the old administration they may be admonished for trying to hit a big shot. Under the new management, they were told “next time hit it even harder.” England had won just one Test from their previous seventeen prior to the change in approach. Following it, they won ten out of twelve.
Of course not all risk is good risk. There are many situations in which caution is a better option. The Silicon Valley mantra of “move fast and break things” has its uses, but it is not necessarily advisable to adopt it wholesale. As Dennisnotes, it might be better to move fast and fix things [8]. To do that, one needs to assess whether they are dealing with an actual risk or a perceived one.
Unlike actual risks, perceived risks are the ones we’ve bigged up in our minds out of a fear of the unknown. It’s not sending off that job application because you’re afraid you’ll get rejected; not trying that new strategy because you worry it might make you look stupid. Such fears are rational, human even. But they serve little purpose. As Eric Hutto, Chief Executive Officer at Diversified, writes in Forbes, “You can’t build a futuristic company when leadership has a legacy mindset that focuses on risk management over taking risks that could result in better performance.” [9]
One need only look at Amazon to see what can happen when a company takes a risk rather than settling for incrementalism. Jeff Bezos could easily have continued as a very successful online book retailer. Instead, he upscaled. The rest is history.
How to implement risk
A 2021 McKinsey study found that more than 80% of executives say innovation is among their organisation’s top three priorities, yet less than 10% say they are satisfied with their company’s performance. Meanwhile, 61% say their organisations are not adapting fast enough to stay ahead of disruption and 78% believe it is increasingly challenging to know which disruptive forces to prioritise. [10]
There is an appetite for risk. But that appetite is being outweighed by fear. The good news is that, ironically, there are ways to implement risk in a relatively risk-free way.
If you’re trying to cultivate a culture of experimentation, Dennis advocates for finding ways to “shrink the change” [11]. By that he means breaking complex and seemingly overwhelming initiatives into a series of more manageable pieces. In other words, don’t try to overhaul everything in one fell swoop. And don’t obsess over the final destination. Take it one step at a time.
Meanwhile, Sundheimrecommends creating a culture in which you question everything.
“What does this business look like in five years? What are our customers worrying about today? What will they be worrying about tomorrow? What are our employees seeing but not saying? Where are we communicating effectively? Where are we failing to communicate? What strengths aren’t we capitalizing on? What opportunities are we letting slip through our fingers? How would we try to beat ourselves if we were our competitors? What weaknesses would we exploit? And where are we settling for “good” when we should really be going for “great?”” [12]
Questioning everything helps ensure you don’t slip into a place of complacency and stagnation. As Sundheim says, it makes it “more uncomfortable to play it safe than to think critically and take risks.” [13]
Writing in Forbes, Rhett Power, CEO and Founder of Accountability Inc., recommends three risks that are usually worth taking, even for those who are generally risk-averse. They are: (1) Moving forward without substantial investor support (2) Hiring on a tight budget (3) Growing your business. [14]
Moving forward without substantial investor support forces one to focus on only the most essential components of their business –– a useful exercise for anyone. Hiring on a tight budget is important because it stops one from taking their team for granted, overloading them with work in the belief that they can pick up the slack. It might work short-term but long-term leads to burnout, resentment and lower-quality work. If you can’t afford to hire full-time, get someone part-time.
While acknowledging that growing one’s business too fast can be a nail in the coffin, Power says that “the risks associated with growth are worth the opportunity to see more success for your business and your team.” [15] To grow successfully, he recommends not conflating overheads with infrastructure and having an operational infrastructure that transcends your employees and management team.
The dangers of playing it safe
Taking risks is dangerous. But so is playing it safe. In a fast-moving global order in which the foundations that held up industries for decades can crumble almost overnight, infinite incrementalism can be a silent killer. Companies need to be open to risk.
To start embracing risk, businesses must first shift their relationship with it. Risk is not an opportunity for failure, it is an opportunity for learning. That does not mean moving recklessly. Rather, it means assessing whether a risk really could be perilous or that’s simply a perception. Companies want innovation. They need to accept that they’re going to have to take some risks to achieve it.
More on Risk
Innovation: Gains, Risks, and the Grey In Between
Sources
[1] https://hbr.org/2013/10/the-hidden-dangers-of-playing-it-safe
[2] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[3] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[4] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[5] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[6] https://www.forbes.com/video/5193863769001/why-you-should-take-more-risks/?sh=1a7db99e1351
[8] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[10] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[11] https://hbr.org/2024/03/why-playing-it-safe-is-the-riskiest-strategic-choice?ab=HP-topics-text-28
[12] https://hbr.org/2013/10/the-hidden-dangers-of-playing-it-safe
[13] https://hbr.org/2013/10/the-hidden-dangers-of-playing-it-safe
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