Creating a Risk-Taking Culture in a Risk-Averse Environment

Is taking risks something you want from your employees? Do you want employees to challenge themselves in new ways? Most organizations do, especially now when maintaining a competitive advantage and staying in business requires new thinking and innovation. But all too often, we experience risk aversion in our workplace – people too afraid of taking risks. The reasons for our employees’ risk-aversion are many, for example…

  • Job security is a predominant source of motivation. Job security has emerged as one of the primary attributes employees are seeking in jobs. Where consequences of taking risks are too severe (loss of pay, job, etc.), employees are likely not going to take risks.
  • Managers are not encouraging risk-taking. Our managers aren’t encouraging employees to take risks. A study conducted by Blessing White found that 41% of employees said their manager never encouraged them to look for new salutation or take risks, and 33% said their manager sometimes encouraged them to take risks.
  • Fear is prevalent. We employ individuals that are afraid to take risks, largely because we’ve institutionalized caution instead of courage. We’ve created negative consequences for failures and mistakes.  Individuals have rarely been held accountable for taking risks during their careers.
  • We haven’t adopted a risk-taking culture. We may say we want risk-taking behaviors, but all too often our culture rewards and enforces behaviors to the contrary. We likely aren’t rewarding employees who take risks, and may even be punishing them for their mistakes and failures.

In order to get employees to take risks, we have to build ways for employees to hedge their bets and overcome their fears and obstacles. We need to create a culture that encourages risk. Here are some ways your organization can build a risk-taking culture.

  • Develop a “try it out” atmosphere where employees are constantly exploring and in the habit of taking on new endeavors regularly. Employees should feel that they have been given the “green light” to explore new possibilities and challenge themselves and others to reach new heights.
  • Discuss opposing viewpoints. Employees generally tend to “follow the leader,” but if your organization wants employees to truly take risks, you’re going to need to embrace them having opposing viewpoints – perhaps different than those in charge. Creating a culture of debate and discussion, and most importantly the ability for employees to freely share their opinions in a constructive manner, leads to more creativity, innovation, and risk-taking.
  • Be accepting of failure. This does not suggest that your organization needs to accept poor performance. There’s a difference between a consistently poor performer, and a failure made in pursuit of a better way of doing things, a new efficiency, a creative endeavor, or an idea to enhance the organization. Not accepting these types of failures and adopting a “sink or swim culture” causes employees to be dissuaded from taking risks. Use failures as opportunities for learning, feedback, and stepping stones to successful ideas. Send clear messages that constructive failures are acceptable.
  • Share successes…and mistakes. Mistakes are a reality of risk-taking. They will happen and you’ll need to embrace them in order to develop a risk-taking culture. When employees witness leaders, managers, and other successful individuals in your organization testify to risks they’ve taken that have not been successful or when they made a mistake taking the risk, employees are more encouraged to take risks and you are more likely to dispel notions that mistakes or failures are fatal, thus eliminating fears.  Encouragement, story-telling, and modeling risk taking behavior by your leaders and line managers is crucial.
  • Educate on risk taking. Many employees don’t know or understand how to take risks, mainly because so many organizations and managers do not actively encourage these types of behaviors. Educating employees on the benefits of risk-taking, how to take risks, what kinds of risks to take, when to take risks, and what physical or psychological barriers they may need to overcome can be beneficial. In addition, having employees observe others taking risks and using them as models for adopting new behaviors can be effective as well.
  • Reward risk-taking behavior. The behaviors you reward and reinforce tend to be the behaviors you get. If you’re not rewarding employees for taking risks (or even worse – punishing them), you’re probably not going to get employees to take risks. Ensure that your managers are praising employees when they take risks, setting up rewards programs that recognize risk-taking behavior, or even incorporating the behavior into a performance review. In addition, make sure that managers and supervisors are rewarded and recognized for encouraging risk-taking and taking risks themselves.


  • Laff, M. (2007). Risk-taking culture is lacking in the US workplace. Training & Development.
  • Encouraging a risk-taking culture (1994). Supervisory Management.
  • Prabhu, J. (2010). The importance of building a culture of innovation in a recession. Strategic HR Review.
  • Farson, R. & Keyes, R. (2002). The failure-tolerant leader. Harvard Business Review.
  • Jassawalla, A. & Sashittal, H. (2002). Cultures that support product-innovation processes. Academy of Management Executive.
  • Messmer, M. (2000). Creating a safe-to-risk work environment. Strategic Finance.
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