Are You Lighting Fires or Getting Burned?

The 2011–2012 Criteria for Performance Excellence have just been released. One new concept introduced is “intelligent risk.” While it is mentioned only in item notes and item descriptions, I believe it is an important concept for all leaders and all organizations to consider as a key factor in organizational sustainability. It is essential in achieving innovation. As a matter of fact, in a study of innovative organizations conducted 20 years ago, Charles Hampden Turner reported (Charting the Corporate Mind, New York: The Free Press, 1990, p. 17) that managers identified two critical elements for innovation: (1) support for risk taking and change and (2) tolerance of mistakes.

The lesson from this study and others is that discouraging risk taking and potentially rewarding risk avoidance (an unconscious practice of many organizations) also discourages and hampers innovation and progress. Properly encouraged, risk is thus a source of opportunity and sustainability—not, as many think, a source strictly of potential danger. Hence, the concept of intelligent risk becomes important to organizational sustainability and to an organization’s senior leadership as a sustainability factor.

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